Indian equity markets opened higher on Monday as Sensex gained 223 points and Nifty rose above 24,850, following Sunday’s sharp Budget-day sell-off triggered by the hike in STT on derivatives.
Equity Markets Remain Cautious; Midcaps, Smallcaps Lag Behind
Mumbai: Indian stock markets opened with modest gains on Monday, with the Sensex and Nifty trading indices trading in the green. This recovery followed Sunday's Budget-Day selloff, after Finance Minister Nirmala Sitharaman announced an increase in the Securities Transaction Tax (STT) on F&O trading. However, market gains were uneven, with investors cautious due to weak market breadth and high volatility.
At 09:25 am on Monday, the Sensex was trading at 80,946, up 223 points, or 0.3%, while the Nifty was trading at 24,856, up 31 points, or 0.1%. Breadth, which indicates market sentiment, was negative, with 1,548 stocks declining and 1,183 advancing. This means that buying was not widespread and occurred only in select stocks.
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This recovery follows sharp losses on Sunday, when the Nifty fell nearly 2%. The market witnessed a risk-off approach following the Finance Minister's decision to increase the Special Tax (STT) on F&O trading. According to experts, this move was aimed at controlling excessive retail investment, but the immediate market reaction was negative.
The India VIX remains above 15, indicating market anxiety and volatility. Analysts say the Nifty is weak below the 25,000 level, with the 24,650-24,700 zone holding key support in the near term.
Infrastructure, energy, and metal sectors gained in the early morning. Larsen & Toubro, Adani Ports, Bharat Electronics, and Reliance Industries were the major Nifty gainers. Auto, FMCG, and healthcare sectors remained under pressure, with Shriram Finance, Bajaj Auto, Titan, Cipla, and ITC declining.
Banking stocks remained flat, while mid-cap and small-cap indices underperformed.
According to analysts, the market's near-term outlook will depend on whether the Nifty is able to stabilize above current levels. The budget emphasized growth and fiscal discipline, but the STT hike has impacted trading volumes, liquidity, and volatility.
Global cues are mixed, with FII flows weak and volatility high. Experts believe investors will wait for clearer signals on the post-budget situation and earnings traction, which could keep the market range-bound in the coming sessions.
