Nifty trades flat as IT stocks lead gains amid Fed rate cut speculation – 1v1 Video Chat & LIve Streaming & Influencer Subscription

By Anupama Ghosh

Benchmark indices opened flat on Wednesday morning, with the Sensex opening at 83,790.72, up from its previous close of 83,697.29, and trading at 83,712.16 at 9.45 am, up 14.87 points or 0.02 per cent. Meanwhile, the Nifty opened at 25,588.30 compared to its previous close of 25,541.80, but edged lower to 25,535.45 at 9:45 am, down 6.35 points or 0.02 per cent.

Information technology stocks emerged as the top performers in early trade, with Infosys leading the gains at 2.31 per cent to trade at ₹1,643.90. Tata Consultancy Services followed with a 1.40 per cent gain to ₹3,477.80, while Wipro and Tech Mahindra advanced 1.04 per cent and 1.03 per cent respectively.

“Fed rate cut hopes are rising, but caution is warranted as any cuts now may stem from economic weakness — sticky inflation, lower GDP, rising unemployment, and weak consumer confidence — rather than strength,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. “All eyes are on the July 9 US tariff deadline and the July 3 NFP data.”

The banking sector faced pressure with IndusInd Bank declining 3.13 per cent to ₹851.60, marking it as the biggest loser among Nifty stocks. Bajaj Finserv dropped 1.11 per cent to ₹2,031.10, while Shriram Finance fell 1.05 per cent to ₹689.15.

Market analysts highlighted the narrow trading range as a key characteristic of the current session. “The benchmark index Nifty traded within a narrow range and formed a Star Doji and a Bullish Homing Pigeon candlestick pattern,” noted VLA Ambala, Co-Founder, Stock Market Today. “The outlook points towards fresh highs in the upcoming July series.”

Defence stocks also witnessed selling pressure with Bharat Electronics Limited (BEL) declining 1.10 per cent to ₹427.50. Consumer goods major Nestle India traded lower by 0.95 per cent at ₹2,387.30.

Foreign Institutional Investors continued their selling streak, offloading equities worth ₹1,970 crore on Tuesday, while Domestic Institutional Investors provided support by purchasing stocks worth ₹771 crore. The sustained FII selling has kept market sentiment cautious despite the overall bullish undertone.

“After breaking the 24500-25000 range Nifty has moved to the new range of 25200-25800,” said Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited. “Positive news about a possible trade deal between India and US can help break the upper limit of the range but it would be difficult to sustain the Nifty at higher levels for long.”

Commodity markets reflected mixed sentiment with crude oil futures trading flat. September Brent oil futures were at $67.14, up 0.04 per cent, while August WTI crude was at $65.47, gaining 0.03 per cent. On the domestic front, July crude oil futures on MCX traded at ₹5,610, down 0.09 per cent from the previous close.

“Crude oil traded steady on Tuesday with a positive bias amid weakness in the dollar index and the U.S. bond yields,” explained Rahul Kalantri, VP Commodities, Mehta Equities Ltd. “However, Israel-Hamas ceasefire talks and build in the US crude oil stocks limits gains.”

The precious metals sector gained momentum as gold and silver extended their gains. “Precious metals extended gains as the dollar index plunged to a 3.5-year low and US 10-year bond yields fell to their lowest in two months,” Kalantri added. “Growing expectations of a rate cut by the Federal Reserve in September provided additional tailwinds for gold and silver.”

Technical analysts suggested a cautious but optimistic approach for the near term. “Based on the current momentum, 25,460 emerges as the immediate support, while 25,630 acts as the key resistance,” Ambala noted. “A strong breakout or breakdown from this range could drive a fresh 1 per cent to 2 per cent move.”

Auto sector showed mixed performance with Hero MotoCorp gaining 0.83 per cent to ₹4,261.20, bucking the trend in the sector. Market participants noted that June auto sales numbers indicated subdued performance across the industry.

“The charts of Bank Nifty indicate that it may get support at 57,300 followed by 57,000 and 56,800,” said Hardik Matalia, Derivative Analyst, Choice Broking. “If the index advances further, 57,650 would be the initial key resistance, followed by 57,800 and 58,000.”

Global markets provided mixed cues with Wall Street ending on a mixed note overnight. The Dow Jones gained 0.9 per cent while the Nasdaq tumbled 0.8 per cent, and the S&P 500 ended flat. Asian markets traded in the red during the morning session.

The India VIX declined 2.01 per cent to 12.5275, indicating reduced volatility expectations among market participants. “A ‘buy-on-dips’ approach remains favorable as long as the index holds above the 25,000 mark,” Matalia suggested. “However, traders are advised to maintain strict stop-losses to navigate through rising intraday volatility.”

Market experts emphasised the importance of upcoming economic data and policy developments. “There are no indications yet of a strong rebound in earnings. GST collections data for June indicates sluggish growth,” Vijayakumar cautioned, highlighting the need for sustained economic momentum to support higher market levels.