Nifty Opens Steady; L&T Gains, Tata Motors Slips on M&A Buzz
The Indian stock market opened steady on Monday, with traders awaiting cues from the Federal Reserve meeting and India-US trade talks. The Nifty traded near 24,860, while the Sensex gained 0.2% to 85,230.
One of the major movers was Larsen & Toubro (L&T), which surged 4% after reporting strong earnings. The company’s net profit rose 14% year-on-year to ₹3,481 crore, beating analyst expectations.
On the other hand, Tata Motors slid 3% after reports emerged that the company is in talks to acquire Iveco, the Italian truck manufacturer. The news sparked concerns about the potential impact on Tata Motors’ finances and its ability to integrate the new business.
The market is expected to remain rangebound in the near term, with analysts predicting a trading range of 24,680-24,920 for the Nifty. This range is likely to be influenced by foreign institutional investors (FIIs) selling and the MSCI rebalancing, which can fuel near-term volatility.
FIIs have been selling Indian stocks in recent months, citing concerns about the country’s economic growth and the impact of the COVID-19 pandemic. This selling pressure has been supporting the rupee and keeping interest rates higher, which can make it more challenging for companies to raise capital.
The MSCI rebalancing, which is scheduled to take place in August, can also have a significant impact on the market. The rebalancing is a periodic review of the MSCI indices, which are widely followed by investors. The review can lead to changes in the composition of the indices, which can affect the stock prices of companies that are added or removed from the indices.
Despite the near-term volatility, many analysts remain optimistic about the long-term prospects of the Indian market. The country’s economic growth is expected to recover in the second half of the year, driven by a rebound in consumption and investment. The government’s efforts to improve the business environment and attract foreign investment are also expected to support the market.
In addition, the Indian market is considered to be relatively undervalued compared to other major markets. The Nifty is trading at around 16 times its trailing earnings, which is significantly lower than the 20-25 times multiple of the S&P 500 in the US.
Overall, while the market may experience some near-term volatility, many analysts believe that it has the potential to deliver strong returns in the long term. Investors who are looking to invest in the Indian market should focus on high-quality companies with strong fundamentals and a proven track record of delivering earnings growth.
Sources:
https://stocktwits.com/news-articles/markets/equity/nifty-sensex-open-steady-july-30/choQYNdR5yC
