Mumbai, Oct 13: Indian equity benchmark indices opened on a flat note on Tuesday as gains in information technology (IT) and real estate stocks provided some support to the market amid continued foreign investor selling and weak global cues.
At the opening bell, the BSE Sensex rose 27.05 points, or 0.04 per cent, to 71,951.73. The NSE Nifty 50 opened at 22,364.15, marginally higher by 0.80 points, reflecting cautious investor sentiment.
Sectoral performance remained mixed, with IT and realty stocks emerging as the leading gainers. The Nifty IT, Nifty Midsmall IT & Telecom and Nifty Realty indices advanced by up to 2 per cent. Public sector bank stocks also traded positively, with the Nifty PSU Bank index rising 0.31 per cent. FMCG and oil and gas shares recorded modest gains.
However, healthcare and pharmaceutical stocks faced selling pressure. The Nifty Midsmall Healthcare, Nifty 500 Healthcare, Nifty Pharma and Nifty Healthcare indices declined by up to 0.75 per cent, indicating selective profit-booking across defensive sectors.
Foreign Investor Selling Remains a Key Concern
Market sentiment continues to be influenced by sustained selling by foreign institutional investors (FIIs), while domestic institutional investors (DIIs) have been providing support through continued purchases in the cash market.
The US 10-year Treasury bond yield remaining above 5.2 per cent has added to concerns over foreign fund flows. Elevated US bond yields can make dollar-denominated assets more attractive, encouraging overseas investors to reduce exposure to emerging markets such as India.
Domestic institutional investors, supported by strong mutual fund inflows, have helped absorb some of this selling pressure. Net inflows into mutual funds reached a record Rs 38,307 crore in September, according to the figures cited by market participants.
The balance between foreign selling and domestic buying is likely to remain an important factor influencing near-term market direction.
Inflation and Crude Oil Add to Market Uncertainty
Inflation and rising crude oil prices have also emerged as important concerns for investors. Consumer Price Index (CPI) inflation stood at 5.54 per cent, while food inflation reached 7.74 per cent. Brent crude prices remained above $100 per barrel, increasing concerns over India’s import bill, domestic inflation and corporate operating costs.
Higher crude oil prices can put pressure on India’s current account balance and the rupee while raising transportation, manufacturing and logistics expenses. Businesses with limited pricing power may find it difficult to fully pass on these additional costs to consumers.
Market participants are also assessing the possibility of a Reserve Bank of India rate hike in December. Any increase in borrowing costs could influence loan demand, corporate investment and household spending. While higher interest rates may support banks’ lending margins in certain circumstances, the overall impact will depend on funding costs, credit growth and asset quality.
Technical Outlook Remains Cautious
Technical analysts have indicated that the market’s recovery momentum has weakened, although the recent pause in selling has raised hopes of a short-term rebound.
The Nifty faces an important resistance level around 22,435. A sustained move above this level could signal improving buying interest. However, failure to cross this threshold may expose the index to further downside, with potential support levels identified in the 22,070–21,900 range.
These levels will remain important for traders assessing whether the market can recover or extend its recent decline.
Global Markets Offer Limited Support
Asian equities traded lower on Tuesday as renewed pressure on artificial intelligence-related stocks weighed on investor sentiment ahead of the upcoming corporate earnings season.
On Wall Street, the Nasdaq ended lower on Monday as rising oil prices following reported attacks on a Saudi airport added to market concerns. Investors are also awaiting third-quarter bank earnings and key economic data this week, which could provide fresh indications about the US economy and the future direction of interest rates.
For Indian markets, the combination of global uncertainty, elevated crude prices, inflation concerns and foreign fund outflows is likely to keep investors cautious in the near term.
Although selective buying in IT and real estate stocks supported the opening session, a sustained recovery will depend on stronger market participation, improved global sentiment and a more favourable trend in institutional fund flows.
