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The Indian stock market experienced a muted opening on Wednesday, July 9th, with both the Nifty and Sensex indices displaying a flat performance. This tepid start occurred despite lingering concerns surrounding U.S. President Donald Trump's tariff threats, suggesting a growing resilience among investors. The Sensex initially dipped by 166.05 points, or 0.20 percent, reaching 83,546.46, while the Nifty fell by 41.85 points, or 0.16 percent, settling at 25,480.65. Market breadth, however, indicated a slightly positive bias, with approximately 1504 shares advancing compared to 932 declining, and 145 remaining unchanged. The Nifty Midcap 100 mirrored the flat performance of the broader indices, whereas the Nifty Smallcap 100 witnessed a modest gain of nearly 0.3 percent, indicating a preference for smaller-cap stocks among some investors. Sectoral performance was mixed, with IT, realty, and banking sectors experiencing declines, while pharma, FMCG, and media stocks demonstrated positive momentum. This sectoral rotation suggests a dynamic market environment where investors are shifting their focus based on perceived opportunities and risks. The lack of progress on an India-U.S. trade deal continued to weigh on market sentiment, with investors expressing disappointment over the absence of any concrete developments. While hopes remain for a future agreement, the deadline has been extended to July 31st, adding to the uncertainty. Trump's recent rhetoric concerning a potential 10 percent tariff on BRICS nations, including India, was largely disregarded by the markets, as investors await further details regarding the trade deal. Trump's statement, "If India is in BRICS, then they’ll have to pay. BRICS was created to damage our economy and remove the dollar as the global standard. If they want to go down that path, I can respond too. So, any country in BRICS will face a 10 per cent tariff," was seen by some as a negotiating tactic rather than a firm policy commitment. Market experts suggested that the current stability, despite prevailing caution regarding the trade deal and the approaching earnings season, indicates that bullish sentiment remains dominant and that an upward trend is anticipated. This perspective suggests that investors are confident in the underlying strength of the Indian economy and expect positive earnings results from listed companies. However, experts also cautioned against complacency, advising participants to prioritize stock selection due to the ongoing sectoral rotation. Ajit Mishra, SVP, Research, Religare Broking, emphasized the importance of maintaining a focused approach to stock selection in light of the dynamic market conditions. Institutional flows revealed that Foreign Portfolio Investors (FPIs) were net sellers of Indian equities, offloading Rs 26 crore worth of shares, while domestic institutional investors (DIIs) were net buyers, purchasing Rs 1,367 crore worth of shares, according to provisional data from the NSE. This divergence in investment patterns between FPIs and DIIs highlights the varying perspectives on the Indian market's prospects. The S&P 500 closed slightly lower after a volatile trading session as investors awaited clarity on U.S. trade policy following President Trump's recent tariff threats, which dampened optimism regarding negotiations with certain trade partners. The Dow Jones Industrial Average fell 165.60 points, or 0.37 percent, to 44,240.76, the S&P 500 lost 4.46 points, or 0.07 percent, to 6,225.52, and the Nasdaq Composite gained 5.95 points, or 0.03 percent, to 20,418.46. Asian shares opened cautiously as investors refrained from making risky investments following President Trump's decision not to extend his August deadline. The price of copper futures declined in response to Trump's tariff threat.
From a technical analysis standpoint, the article highlights critical levels for the Nifty index. As long as the index remains above the previous session's low of 25,424.15, the bullish trend is expected to persist. A sustained move above the 25,500 mark will be crucial for confirming a directional bias in the coming session. Such a breakout could trigger short-covering, potentially forcing bears to unwind their positions. Conversely, the 25,300–25,400 range has emerged as a significant support zone, where the index has demonstrated a strong rebound and found support near the 10-day EMA, indicating robust intraday reversal potential. A strong intraday close above the 25,600 mark, accompanied by sustained buying pressure, could reignite bullish momentum and pave the way for a move towards the psychological level of 26,000, according to Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities. These technical levels provide traders and investors with key reference points for monitoring market movements and making informed trading decisions.
The derivatives segment offers additional insights into market sentiment and potential future movements. Open interest (OI) data reveals that the highest Call OI is concentrated at the 25,600 strike, followed by 25,700, suggesting a potential resistance zone. On the Put side, the highest OI is observed at the 25,500 strike, followed by 25,400, indicating strong support levels. This OI setup suggests that the 25,400–25,600 zone will be crucial for determining the Nifty's next directional move, according to Hardik Matalia, Derivative Analyst at Choice Broking. This information is valuable for traders and investors who utilize options strategies to manage risk and capitalize on market movements. The concentration of Call OI at higher strike prices indicates that many traders are betting against a significant upward move in the near term, while the concentration of Put OI at lower strike prices suggests that other traders are anticipating a potential downside risk and are positioning themselves to profit from a decline in the index. The interplay between these two opposing forces will likely influence the market's direction in the coming days.
In conclusion, the Indian stock market displayed a resilient but cautious performance in the face of global trade uncertainties and awaited domestic developments. The Nifty and Sensex indices opened flat, reflecting a mixed market sentiment. Sectoral rotations, institutional flows, and technical levels all provided valuable insights into the market's dynamics. While bullish sentiment appears to be dominant, caution remains warranted, and a focus on stock selection is advised. The outcome of the India-U.S. trade deal negotiations and the upcoming earnings season will be critical factors shaping the market's trajectory in the near future. Furthermore, derivative data suggests a crucial battleground between 25,400 and 25,600, where the balance between call and put open interest will dictate the Nifty's next directional move. Investors should closely monitor these factors and adjust their strategies accordingly to navigate the evolving market landscape. The global economic climate, particularly developments in international trade relations, will continue to exert a significant influence on the Indian stock market. Therefore, staying informed about global events and their potential impact on domestic markets is crucial for making sound investment decisions. The article emphasizes the importance of expert analysis and careful consideration of risk factors before making any investment decisions, highlighting the inherent uncertainties associated with market participation.
Source: Nifty tests 25,500, Sensex opens flat as tariff threats lose steam, volatility continues to cool