Indian investors are worried about valuations. However, analysts say corrections act as a good opportunity to buy as fundamentals of the Indian ecosystem looks strong.
“There are conflicting signals that might influence the markets in the short-term. Rise in US 10-year bond yield is a negative for emerging markets like India, particularly if this trend sustains and gathers momentum, going forward. Rise in Brent crude to $80 is a negative for India’s macros,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices slipped lower. At 9.33 am, BSE flagship Sensex was down 66 points or 0.11 per cent to 60,012. NSE benchmark Nifty declined 11 points or 0.06 per cent to 17,845.
“For Nifty, 17,700 shall act as a crucial support while near-term resistance could be seen around 18,000 levels,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Coal India was the biggest gainer, up 3.14 per cent. NTPC, PowerGrid, Indian Oil, UltraTech Cement, HUL, SBI and Bharat Petroleum were among other gainers.
HCL Tech was the top loser in the pack, down 2.08 per cent. Infosys, Wipro, Asian Paints, Tech Mahindra, Cipla, TCS, HDFC Bank, Sun Pharma and Bajaj Finserv were among those that traded in the red.
FACTORS DRIVING MARKETS
Good news
Tax collections: Advance tax collections from top 20 companies reportedly jumped more than 47 per cent during the second quarter of FY22 to Rs 27,210 crore versus the same period last year, indicating a strong uptick in economic growth.
Bad news
Power shortage in China: Widening power shortages in China, meanwhile, halted production at a number of factories including suppliers to Apple Inc and Tesla Inc and are expected to hit the country’s manufacturing sector and associated supply chains.
Evergrande crisis: Evergrande has 30 days to make the payment before it falls into default and Shenzen authorities are now investigating the company’s wealth management unit.
Yields rise: US Treasury yields soared to a three-month high, touching 1.516 per cent overnight following the Federal Reserve’s move last week to indicate fiscal stimulus could be tapered as early as November.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.10 per cent while Nifty Midcap advanced 0.07 per cent. Broadest index on NSE, Nifty 500, was up 0.04 per cent.
Century Ply, CAMS, Welspun India, IRCTC, Concor and Godrej Agrovet were gainers from the space while Oberoi Realty, Coforge, Indiabulls Housing Finance, KEI Industries, Westlife Developments and Wockhardt were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.13 per cent lower on Tuesday, following a mixed session on Wall Street.
In early trade Tuesday, Australia’s benchmark S&P/ASX200 index was down nearly 1 per cent, while Japan’s Nikkei was off 0.6 per cent. China’s blue chip index CSI300 edged up 0.1 per cent at the open, as Hong Kong’s Hang Seng Index gained 0.44 per cent.
