Sensex, Nifty slip at open amid mixed global cues; banking, auto stocks weigh

India VIX, also known as the fear gauge, rose nearly 6 percent to 12.6.

Domestic equity markets kicked off September 30 on a weak note, with the Sensex and Nifty 50 sliding amid mixed global cues. Banking, energy, and auto stocks led the decline, dragging the Nifty 50 lower in early trade.

At 9.17 AM, the Sensex was down 369.68 points or 0.4 percent at 85,202 and the Nifty was down 94 points at 26,084.50. About 1,574 shares advanced, 1,086 shares declined, and 174 shares remained unchanged.

"We are on the expensive side, but there are very few markets growing like India," Sandip Agarwal, Fund Manager and Co-Founder at Sowilo Investment Managers LLP told Moneycontrol. "We have a stable government, fiscal deficit under control, a stable currency, and controlled inflation. I believe a lot of FII money will start flowing in, leading to further market re-rating. The market may look expensive, but fundamentally, we're in a strong position.

Agarwal expects only minor corrections, possibly triggered by geopolitical events like the escalating tensions in the Middle East.

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Of the 13 major sector indices, 11 were in the red today.

Nifty Auto dropped over 1 percent, driven by declines in M&M, Hero MotoCorp, and Tata Motors. Motilal Oswal said in a research report that demand trends in September remained weak across segments, despite festivals like Ganesh and Onam. The inauspicious Shraddh period further impacted sales, leading to a year-on-year decline in retail sales across categories.

Nifty FMCG and Nifty Metal were the only gainers, rising 0.3 percent and 1 percent, respectively. Shares of metal companies were on a roll buoyed by a spike in iron ore prices along with China's efforts to revive its battered property sector. Stocks like NMDC, MOIL, Hindalco and Welspun Corp were the top sectoral gainers, surging 2-4 percent.

Top Nifty 50 gainers included Titan, Tata Steel, NTPC, JSW Steel, and Hindalco, up 1-1.5 percent, while Tech Mahindra, M&M, Bharat Electronics, Coal India, and Hero MotoCorp fell 1-3 percent.

Also Read | September sees largest retail sell-off since march with net sales at Rs 7,500 crore

Rupak De, Senior Technical Analyst at LKP Securities said that the market sentiment will remain strong as long as Nifty 50 remains above 25,900. "On the higher end, a fresh round of rally may begin above 26,300. If the Nifty moves above 26,300, it could potentially rise towards 26,600," he said.

Mainland China stocks surged 4 percent today after September's PMI came in at 49.8, beating the expected 49.5 polled by Reuters. Japan's Nikkei 225 plunged over 5 percent as investors reacted to Shigeru Ishiba's win in the Liberal Democratic Party elections, set to make him Japan's next prime minister.

Meanwhile, the Dow Jones Industrial Average closed at a record high on September 27, as a subdued inflation report raised hopes for more Fed rate cuts. The Nasdaq dipped slightly, and the S&P 500 edged lower but remained near record levels.

Looking ahead to Q2 earnings, Agarwal expects a positive surprise, as pent-up demand and election-related disruptions fade.

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