Markets open mixed as Fed rate cut uncertainty persists; metal stocks lead gains 

Benchmark indices opened flat on Tuesday, with the Sensex trading at 82,049.88, down 9.54 points (0.01 per cent), and the Nifty at 24,932.25, down 13.20 points (0.05 per cent) as of 9.35 am. The cautious trading follows Monday’s session where both indices declined, with the Nifty slipping below the key psychological level of 25,000.

Metal stocks emerged top performers in early trading, with Tata Steel leading gainers at 2.20 per cent, followed by JSW Steel at 1.18 per cent and Hindalco at 1.06 per cent. Technology major Infosys also showed strength, rising 1 per cent, while Coal India advanced 0.99 per cent.

Among losers, financial and auto stocks faced selling pressure. Shriram Finance declined 1.17 per cent, Hero MotoCorp fell 1.14 per cent, and Eicher Motors dropped 1.02 per cent. Jio Financial and HDFC Bank were down 0.97 per cent and 0.82 per cent, respectively.

Monday’s session marked a notable shift in institutional activity, with both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) emerging as net sellers — their first joint sell-off in over a month.

“In the near-term the market is likely to move to a consolidation phase. The high valuations will put a cap on the upside, with institutional selling emerging on the upside,” said Dr V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd.

Global cues remain mixed after Moody’s downgrade of the US sovereign credit rating from “Aaa” to “Aa1” introduced uncertainty in financial markets. Despite early losses, US markets recovered by Monday’s close, with investors digesting the downgrade news.

“US stocks recovered from steep early-session losses and closed slightly higher on Monday. The 10-year Treasury shot up to 4.56 per cent early Monday, its highest intraday level in over a month. However, it was at 4.45 per cent in late trading, little changed from its close on Friday,” noted Devarsh Vakil, Head of Prime Research at HDFC Securities.

Crude oil futures traded nearly flat amid lack of progress in the US-Iran nuclear deal talks. At 9:26 am, July Brent oil futures were at $65.53, down by 0.02 per cent, while July WTI crude oil futures were at $62.17, up by 0.05 per cent. On MCX, June crude oil futures were trading up 0.64 per cent at ₹5,333.

Gold continues to find support as a safe-haven asset amid economic uncertainty. “Gold prices surged on Monday as rising Treasury yields were offset by a falling dollar index and Moody’s downgrade of the US sovereign credit rating,” said Aksha Kamboj, Vice-President, India Bullion and Jewellers’ Association.

From a technical perspective, analysts see continued support for the market despite recent profit-taking. “Nifty is placed above all key moving averages, indicating the continuation of an uptrend. Immediate support for the Nifty is seen in the band of 24750-24800, while positional support stands at 24500,” added Vakil.

Mandar Bhojane, Equity Research Analyst at Choice Broking, advised caution: “Given the global uncertainties, traders are advised to approach the market cautiously, maintain strict risk management, and avoid large overnight positions.”

Several key companies are scheduled to announce their Q4 results today, including Dixon Technology, Fortis, GSFC, Hindalco, JK Tyre, Max Health, NHPC, Torrent Pharma, and Zydus Life, which could influence sector-specific movements.

The Indian rupee showed strength against the US dollar, appreciating by 10 paise to settle at 85.40 on Monday, supported by cooling crude oil prices and a softening US dollar.

Market participants are now focusing on upcoming Federal Reserve officials’ speeches for insights into the US economic outlook and monetary policy direction, which could provide further cues for Indian markets in the coming sessions.

Published on May 20, 2025