The Indian stock market traded lower after opening higher on Monday, amid profit booking after witnessing a sharp rally in the previous week, and a subdued Muhurat trading session.
The Sensex traded over 100 points lower to trade around 80,900, while the Nifty 50 traded around 24,950 level. The Bank Nifty index held above 59,000 level.
Broader markets also reeled under selling pressure, as the Nifty Smallcap 100 and the Nifty Midcap 100 indices declined half a percent each.
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Among sectors, losses were seen in Nifty IT, Nifty Metal, Nifty Realty, Nifty Auto and Nifty FMCG, while Nifty Pharma, Nifty PSU Bank, Nifty Media and Nifty Private Bank were in the green.
Globally, Asian markets traded mostly higher, while the US stock market ended mixed last week, with the Nasdaq Composite Index posting a fourth consecutive weekly decline.
In this holiday-shortened week, market participants will watch out for inflation data in India, US and China, along with the developments in the US-Iran war, flow of foreign funds and the next leg of September-quarter earnings.
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Last week, the Indian stock market surged, with the benchmark Nifty rallying 8.6%, improving sentiments.
“A rare convergence of positive news for India – FIIs turning aggressive buyers, fair valuations, winding down of AI trade, dip in crude price, decline in US bond yields and steadily improving corporate earnings as reflected in Q2 numbers- triggered the rally,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments.
When the situation turns favourable, the market needs only a trigger to rally. This trigger was provided by the Democrat’s victory in the US elections, which, in turn, caused fears of deceleration in AI spending and sharp correction in AI stocks, he added.
“The FII buying in India is likely to sustain paving the way for further rally in largecaps. It is important to understand that FII allocations track index weights during major market shifts,” Vijayakumar added.
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