Indian equity markets gave up early gains on January 6, reflecting investor caution driven by persistent foreign fund outflows and apprehensions ahead of the upcoming earnings season.
After opening in positive territory, key indices such as the BSE Sensex and NSE Nifty witnessed a reversal, with selling pressure emerging across sectors. Analysts attributed the volatility to concerns over global economic conditions and the impact of rising interest rates on corporate profitability.
Foreign institutional investors (FIIs) continued their selling spree, pulling funds out of Indian equities in favor of safer assets amid global uncertainties. This trend has added pressure on domestic markets, which are already grappling with subdued sentiment.
Market participants remain cautious as corporate earnings for the third quarter approach, with expectations of mixed results due to inflationary pressures and a challenging macroeconomic environment. Sectors such as IT, banking, and FMCG are particularly under scrutiny as analysts anticipate their performance to set the tone for market trends.
Despite the volatility, domestic institutional investors (DIIs) provided some support, buying selectively in beaten-down sectors. However, the broader sentiment remained muted, with market breadth indicating more losers than gainers.
As traders await key corporate results and macroeconomic data in the coming weeks, experts advise a balanced approach, focusing on quality stocks with strong fundamentals.
