Markets open flat as IT stocks drag despite global optimism

Benchmark indices opened marginally higher on Wednesday but quickly turned flat as gains in metals and banking stocks were offset by weakness in the IT sector. The BSE Sensex was trading at 75,382.33, up 81.07 points or 0.11 per cent, while the NSE Nifty edged higher by 39.15 points or 0.17 per cent to 22,873.45 in early morning trade.

The market’s mixed performance comes after Tuesday’s robust rally, where the Sensex surged 1,131 points and the Nifty gained 326 points. Market analysts note that Foreign Institutional Investors (FIIs) turned net buyers after 17 consecutive sessions of selling, purchasing equities worth Rs 1,462.96 crore on March 18, while Domestic Institutional Investors (DIIs) bought shares worth Rs 2,028.15 crore.

“Despite recent strength, a soft Nifty opening is likely as investors turn cautious, with focus on the FOMC meeting and gold prices hitting fresh highs,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd. He added that “bullish consolidation is expected, though volatility may persist.”

The IT sector emerged as the major laggard in today’s session, with TCS leading the decline, falling 1.89 per cent. Other IT heavyweights also saw significant drops, with Infosys down 1.79 per cent, HCL Technologies declining 1.67 per cent, and Tech Mahindra shedding 1.28 per cent.

On the positive side, Tata Steel topped the gainers’ list with a 1.67 per cent increase, followed by IndusInd Bank also gaining 1.67 per cent. Bajaj Finance rose 1.54 per cent, BPCL advanced 1.44 per cent, and Apollo Hospitals climbed 1.39 per cent.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on market sustainability: “The positive domestic macros favour continuation of the rally. If FIIs continue to buy, the rally can sustain, but it remains to be seen. The external factors continue to be negative and hugely uncertain. April 2nd and reciprocal tariffs are not far away.”

According to Vikas Jain, Head of Research at Reliance Securities, “Nifty-50 has extended the up move near to 22,800 levels as expected and now the resistance of 20-day average will act as strong support near to 22,580 levels.” He further added that “on the higher side now the band of resistance would move to 23,000-23,200 levels.”

The broader market showed better momentum with the Nifty Midcap gaining 2.2 per cent and Nifty SmallCap surging 2.72 per cent in the previous session. All sectors closed positively on Tuesday, led by gains in Bank Nifty (+2 per cent) and PSU Banks (+2.3 per cent).

Hardik Matalia, Derivative Analyst at Choice Broking, pointed out, “After a positive opening, Nifty can find support at 22,750 followed by 22,650 and 22,550. On the higher side, 22,950 can be an immediate resistance, followed by 23,000 and 23,100.”

In commodities, gold prices reached a fresh all-time high while silver hit a 12-year high amid escalating tensions in the Middle East. “Gold and silver prices rose in global markets due to increased safe-haven demand following renewed Middle East tensions,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd.

The global economic outlook remains cautious, with the Organisation for Economic Co-operation and Development (OECD) trimming its projection for global growth from 3.3 per cent to 3.1 per cent for 2025. VLA Ambala, Co-Founder of Stock Market Today, noted, “This revised estimate is primarily based on weaker growth projections in the US and the eurozone, which may affect our Indian markets due to our foreign trade relations.”

Shrikant Chouhan, Head Equity Research at Kotak Securities, advised a tactical approach for traders: “We believe the short-term market outlook is bullish; but for day traders, buying on intraday corrections and selling on rallies would be the ideal strategy.” He suggested that “in the near term, 22,700/75000 and 22,600/74500 would act as key support zones, while 22,950/75600 and 23,000/75800 could act as profit-booking zones.”

Market participants remain watchful of the upcoming Federal Reserve meeting outcome and potential developments regarding U.S. trade policies, particularly the implementation of reciprocal tariffs scheduled for April 2nd, which could impact global trade dynamics and market sentiment in the coming days.