The Indian stock markets were nearly unchanged on Tuesday, July 21, as investors stayed cautious amid uncertainty in global geopolitics in the Middle East. Information technology, metal and some banking stocks outperformed most of the stocks, but the heavyweight financial stocks dragged the indices back to Monday's close.
At 9:16 am, the BSE Sensex was down 41.83 points, or 0.05 percent, at 77,666.69. The NSE Nifty was almost flat at 24,216.05. The cold start was indicative of the cautious mood of investors, with global developments, crude oil prices and the upcoming quarterly earnings season being important drivers of market sentiment.
But the broader markets performed better than the headline indices. The Nifty Next 50 rose 0.33 per cent and Nifty Midcap Select rose 0.29 per cent. The Nifty Midcap 100 rose 0.26 per cent and the Nifty Smallcap 100 climbed 0.41 per cent. It suggests that with little clear direction in the benchmark indices, there is still a lot of buying interest in mid- and small-cap stocks.
The Nifty Metal was the best performing among sectoral indices, rising 0.68%. The Nifty PSU Bank index rose 0.52 per cent and Nifty IT gained 0.21 per cent. Nifty Realty and Nifty Auto also rose 0.19 per cent and 0.14 per cent, respectively.
On the other hand, the Nifty Pharma index fell 0.17 per cent. Nifty Financial Services and Nifty Financial Services 25/50 fell 0.07 per cent each, reflecting pressure on key financial stocks.
UltraTech Cement, ICICI Bank, Maruti Suzuki, NTPC and IndiGo were among the top gainers. Bajaj Finserv, HDFC Bank, Eternal, Axis Bank, Mahindra & Mahindra and State Bank of India were among the stocks trading lower.
Market participants are also closely watching technical levels for further direction. Shrikant Chouhan, Head of Equity Research at Kotak Securities, explained that the market had been resilient in the previous session to some extent, despite poor global cues, with buying emerging at lower levels after an initial decline.
According to Chouhan, 24,000 for the Nifty and 76,800 for the Sensex are important support levels, while 24,350 and 78,300 are key resistance zones. A close below support could lead to further weakness, while a strong move above resistance could see a retest of higher levels.
Global cues were mixed, with regional markets in Asia looking generally positive. Japan's Nikkei was up more than 1 per cent, while South Korea's Kospi climbed nearly 3 per cent. The MSCI Asia-Pacific index excluding Japan rose more than 1 per cent.
Crude oil prices eased after climbing to one-month highs, with Brent crude slipping 0.38 per cent to $88.88 a barrel. Hopes of renewed diplomatic efforts to secure a ceasefire involving Iran and a US-backed coalition provided some relief to global markets.
Investors are also waiting for quarterly earnings from major global technology companies this week. Future developments in the Middle East and movements in oil prices will also be important in determining market direction.
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