Sensex off to a choppy start, Nifty tests 25,100; bank stocks top drags

Tracking positive cues from the US and Asian markets, benchmark indices Sensex and Nifty opened higher for the fifth straight session on Tuesday, buoyed by optimism around US-China trade talks and supportive domestic policy signals. However, early gains were short-lived as the market quickly slipped into a volatile trading pattern.

At 9:32 am, the BSE Sensex was down 160 points, or 0.19%, at 82,284, while the Nifty50 dropped 5 points, or 0.02%, to 25,097.

Among Sensex constituents, IndusInd Bank, Tech Mahindra, Tata Steel, UltraTech Cement, Infosys, and NTPC opened in the green, while Eicher Motors, Asian Paints, ICICI Bank, HUL, and Bajaj Finserv saw declines.


Elsewhere in Asia, markets opened higher, with the MSCI Asia ex-Japan index up 0.5%.

On Wall Street, US equities closed mostly higher overnight and the dollar eased as trade talks between the US and China kicked off in London, aiming to resolve a dispute that has weighed on global markets for much of the year. US President Donald Trump said he was receiving "good reports" on the progress of the negotiations.

Among individual stocks, Jana Small Finance Bank surged over 6% after the lender announced it has submitted an application to the Reserve Bank of India (RBI) seeking a universal banking licence.

Premier Energies rose nearly 4% amid reports that South Asia Growth Fund II Holdings likely offloaded up to 2.5 crore shares, representing about 5.5% of the company’s equity, via block deals.

On the sectoral front, Nifty Bank and Financial Services declined 0.3% and 0.5%, respectively, while Nifty Auto, IT, Media, Metal, and Oil & Gas gained up to 1.1%. In the broader market, the Nifty Midcap100 and Smallcap100 rose 0.2% and 0.3%, respectively.

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Experts View

"Nifty is likely to consolidate in the 24500 - 25500 range in the near term. There are no short-term triggers to take the Nifty beyond the upper band. Some profit booking pulling the market slightly down is likely. But ample liquidity will ensure that dips will get bought, helping the market to consolidate," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

"From a global perspective, market participants will be keenly following the progress of trade talks between the U.S. and China. Even though there is optimism regarding a favourable outcome, it is unlikely to happen quickly," Vijayakumar added.

Devarsh Vakil, Head of Prime Research at HDFC Securities, said, "By decisively breaking out from its consolidation range of 24,500 to 25,100, Nifty has re-entered a phase of bullish momentum. The index is now likely to extend its rise towards 25,307. On the lower side, the immediate support level has now shifted upwards to 24,800."

Global Markets

Stocks were buoyant and the dollar remained on guard on Tuesday as trade talks between the United States and China were set to extend to a second day, with tentative signs tensions between the world's two largest economies could be easing.

U.S. President Donald Trump put a positive spin on the talks at Lancaster House in London, which wrapped up for the night on Monday and were set to resume at 0900 GMT on Tuesday.

Stocks advanced in Asia, extending their rise from the start of the week. EUROSTOXX 50 futures and FTSE futures both added roughly 0.1% each.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.5%, while Nasdaq futures gained 0.62%. S&P 500 futures edged 0.43% higher.

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FII/DII Tracker

Foreign institutional investors (FIIs) bought equities worth Rs 1,992.87 crore on June 9, while domestic institutional investors (DIIs) continued their buying spree with purchases worth Rs 3,503.79 crore.

Crude Oil

Oil prices climbed on Tuesday as investors awaited the outcome of U.S.-China talks that could pave the way for easing trade tensions and improve fuel demand.

Brent crude futures rose 28 cents, or 0.4%, to $67.32 a barrel by 0330 GMT. U.S. West Texas Intermediate crude was up 23 cents, or 0.4%, at $65.52.

Rupee vs Dollar

The Indian rupee rose 5 paise to 85.61 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, rose 0.20% to 99.13 level.

(With inputs from agencies)