Ahead of the Federal Reserve Chair’s congressional testimony and key US jobs data, Indian equity indices fell in early trade on Wednesday, dragged by information technology stocks.

The BSE Sensex was trading 210 points or 0.28% lower at 73,466. Nifty50 was trading at 22,300, down 56 points or 0.25% at around 9.19 am.

From the Sensex stocks, Tech Mahindra, TCS, Wipro, Infosys, and HCL Tech were the top laggards, while L&T, Reliance Industries, Kotak Bank, JSW Steel, and Tata Steel opened with gains.

Among individual stocks, IIFL Finance opened with a 20% lower circuit for the second consecutive session after the Reserve Bank of India barred the company from financing against shares and debentures.

Zomato shares fell 3.6% amid block deals. According to news reports, Ant Financial Group was looking to sell a 2% stake in online food delivery aggregator through a block deal.

Nifty IT fell nearly 1% in early trade, led by Mphasis, Wipro, and Tech Mahindra. IT companies earn a significant share of their revenue from the U.S., where Federal Reserve Chair Jerome Powell’s congressional testimony and key labour market data are both due later in the week, with markets awaiting clues on future rate trajectory.The broader, more domestically focussed small-caps and mid-caps fell 1.2% and 0.5%, respectively as concerns persisted over excessive fund inflows into the segments.

Experts View

“A significant recent development is the liquidity in the banking system moving from deficit to surplus. This is positive for banks, particularly those which are facing constraints in raising deposits to match credit growth. The impact on the market would be the outperformance of Bank Nifty over Nifty,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“Nifty is likely to consolidate at around the present levels. Dips will be bought since institutional buying has been strong. Sentiments are a bit weak in the NBFC space due to RBI’s restrictive actions against some NBFCs,” Vijayakumar said.

Aditya Gaggar, Director of Progressive Shares, said, “After testing its strong support of 22,300, the Index has formed another DOJI candlestick pattern which indicates indecisiveness between the bulls and bears. A convincing close above 22,420 is a must to resume its uptrend.”

Global Markets

Asian equities eased on Wednesday in cautious trading, with Chinese stocks slipping as the lack of big stimulus measures from Beijing disappointed some investors.

The blue-chip CSI 300 Index fell 0.42% while Hong Kong’s benchmark Hang Seng was 0.73% higher.

Overnight, Wall Street’s three major indexes retreated more than 1%, with weakness in megacap growth companies such as Apple and the chip sector weighing most on the tech-heavy Nasdaq.

FII/DII Tracker

Foreign portfolio investors bought shares worth Rs 574 crore on Tuesday, while domestic institutional investors purchased Rs 1,835 crore worth of shares.

Oil Impact

Oil prices rose slightly on Wednesday amid concerns about demand growth in China, the world’s biggest crude importer, clashed with signs of supply tightness amid output cuts by major producers.

Brent crude futures rose 15 cents to $82.20 a barrel, while U.S. West Texas Intermediate crude futures gained 17 cents to $78.32 a barrel.

Currency Watch

The Indian rupee opened flat at 82.90 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 0.02% to 103.8 level.

(With inputs from agencies)


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