Markets Open Higher; Auto Stocks Lead as Volatility Lingers
Indian equity benchmarks opened on a positive note on Tuesday, buoyed by gains in auto stocks, though broader indices struggled under the weight of profit booking. Early trade saw the Sensex climb nearly 100 points, while the Nifty50 hovered above the 25,200 mark, setting a cautious but firm tone.Despite the initial uptick, market breadth remained mixed as profit-taking in select pockets introduced early volatility.
FIIs Continue to Dictate Sentiment
Foreign institutional investors (FIIs) remain a key influence on market direction. According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, persistent FII selling has weighed heavily since September 2024. “FIIs sold equities worth ₹1,21,210 crore last year, and ₹1,79,200 crore so far this year,” he said, adding that India’s relatively high valuations compared with global peers have prompted profit booking abroad.
However, Vijayakumar noted that things could turn around once corporate earnings improve, particularly during the upcoming festival season. “Auto bookings are already showing a sharp spike,” he added, underscoring the sector’s strength.
Key Levels to Watch
The weekly derivative expiry is also adding tension to the market’s near-term trajectory. Hariprasad K, Sebi-registered analyst and founder of Livelong Wealth, highlighted the 25,100–25,150 range as immediate support. “A sustained hold here could steady the Nifty, but a breach may push the index towards the psychological 25,000 mark,” he cautioned. On the upside, resistance is pegged at 25,300–25,350.Technical indicators point to a phase of consolidation.
The Nifty’s 14-day RSI has cooled to 58 from 68 last week, suggesting that the market may take a breather after recent gains. Analysts expect the index to trade within the 25,150–25,450 range through the day.
Institutional Flows and Global Cues
Institutional activity remained choppy. FIIs pulled out ₹2,792.03 crore in the last session, offsetting an inflow of ₹2,434.50 crore from the previous day. Ponmudi R, CEO of Enrich Money, said the pattern indicates “cautious sentiment, with intermittent buying providing only sporadic support.”
Global signals added to investor nervousness. Gift Nifty had earlier pointed to a muted opening, tracking concerns over US interest rates, fresh inflation data, and bond market volatility. Traders are closely eyeing the 25,000–25,200 support zone; a strong base here could trigger fresh buying, while resistance around 25,400–25,500 remains the hurdle before a possible push towards 25,700–26,000.
Sector and Index Highlights
The Bank Nifty displayed resilience, holding its upward trendline despite trading below the 5-day EMA, which reflects short-term weakness. Support for the index lies at 55,192 and 55,000, while resistance is seen at 55,400–55,600. Analysts believe that a breakout above this band, backed by strong volumes, would be critical to regaining momentum.
Meanwhile, the auto sector remained the star performer, driving early gains and offsetting weakness in other pockets.
Outlook
As trading progresses, analysts expect the market to swing between . With FIIs keeping traders on edge and global uncertainties in play, the will be crucial in determining whether the benchmarks can extend their momentum beyond the opening bounce.
