Indian stock markets extended their bullish trend on Tuesday as Nifty and Sensex recorded gains for the third consecutive session. Experts caution that selling pressure remains amid MSCI rebalancing-driven FII buying
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Indian equity markets extended their bullish run for the third consecutive session on Tuesday, supported by continued buying sentiment.
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The Nifty 50 index opened on a positive note at 24,343.30 points, gaining 121.40 points or 0.5 per cent. Similarly, the BSE Sensex climbed 305 points, marking an increase of 0.38 per cent to reach 80,415.47 points at the opening bell.
Despite the sustained rally, market experts have highlighted the presence of selling pressure. According to ANI, the recent surge in Foreign Institutional Investors’ (FIIs) purchases, amounting to Rs 9,947 crore on Monday, was linked to MSCI rebalancing, which included an increased weightage for HDFC Bank. Conversely, Domestic Institutional Investors (DIIs) sold equities worth Rs 6,907 crore on the same day.
Explaining the dynamics, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "The two-day rally in the market is unlikely to sustain beyond a point since earnings concerns are major headwinds. The impact of short covering and the Maharashtra election results will be temporary." He also noted, "Too much should not be read into FIIs turning big buyers yesterday, as this was largely due to MSCI rebalancing. Leading banks will remain resilient due to consistent buying and reasonable valuations. Moving forward, global cues such as developments from President Trump will influence sentiment."
MSCI rebalancing, a periodic adjustment process to add or remove stocks from MSCI indices, aims to maintain their reliability as market benchmarks.
Sectoral indices also reflected strong performance, with Nifty Financial Services leading the pack, gaining 0.71 per cent. Nifty Bank and Nifty Auto followed with modest gains.
Out of the Nifty 50 stocks, 37 opened in the green, six registered declines, while seven remained unchanged. Top gainers included Bharti Airtel, Infosys, ITC, BEL, and Hindustan Unilever. Conversely, ONGC, Adani Ports, NTPC, Ultratech Cement, and L&T were the top laggards.
Akshay Chinchalkar, Head of Research at Axis Securities, commented on the technical outlook: "The Nifty rose 1.3 per cent yesterday, marking the second consecutive session with over a 1 per cent gain, a streak last witnessed in December. The gap-up move means 23,956 becomes a critical support level, while 24,340-24,530 is a key resistance zone. Beyond this, the 50-day and 100-day averages around 24,700-24,800 represent the next hurdles."
In the broader Asian markets, indices showed mixed trends. Japan's Nikkei 225 fell by 1.3 per cent, Taiwan's Weighted Index declined by 0.79 per cent, and South Korea's KOSPI dropped by 0.55 per cent. However, Hong Kong's Hang Seng Index registered a marginal gain of 0.37 per cent during the day, according to ANI reports.
While Indian indices remain buoyant for now, market participants are closely watching for further cues on global economic developments and earnings trends.
(With inputs from ANI)
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