Nifty Opens Steady; L&T Gains, Tata Motors Slips on M&A Buzz
Indian markets opened flat on July 30, with traders awaiting cues from the Federal Reserve’s monetary policy meeting and ongoing India-US trade talks. The Nifty 50 index traded near 24,860, indicating a steady start to the day’s session.
However, the market’s calm demeanor was disrupted by a flurry of merger and acquisition (M&A) news, which sent sector-specific stocks into a tizzy. Tata Motors, the country’s largest automaker, was one of the biggest losers, slipping 3% after reports emerged that the company was in talks to buy out Italian truck maker Iveco. The news sent investors into a selling frenzy, with the stock closing 3% lower on the day.
On the other hand, Larsen & Toubro (L&T), one of India’s largest engineering and construction companies, surged 4% after reporting strong earnings for the quarter ended June 30. The company’s solid performance, coupled with a positive outlook for the industry, sent its stock soaring, making it one of the top gainers on the Nifty.
The market’s mixed reaction was attributed to a range of factors, including the ongoing trade tensions between the US and China, as well as the likelihood of foreign institutional investors (FIIs) continuing to sell Indian stocks. Analysts at various brokerages have been warning of potential volatility in the near term, citing the MSCI rebalancing exercise, which is set to take place in August.
The MSCI rebalancing exercise is expected to lead to a significant change in the composition of the MSCI India index, with some stocks being added or removed from the benchmark. This, in turn, could lead to increased volatility in the market, particularly in the days leading up to the rebalancing exercise.
“We expect the Nifty to trade rangebound between 24,680 and 24,920 in the near term, with FII selling and MSCI rebalancing likely to fuel near-term volatility,” said a report from brokerage firm, Axis Securities.
The Fed’s monetary policy meeting, which is scheduled to take place later in the day, is also expected to have a significant impact on the market. The US central bank is widely expected to cut interest rates for the first time in over a decade, which could have a positive impact on emerging markets like India.
However, the market is also awaiting cues from the India-US trade talks, which are set to resume in the coming days. The ongoing trade tensions between the two countries have been a major concern for investors, and any developments on this front could have a significant impact on the market.
In the currency market, the Indian rupee opened flat against the US dollar, trading at around 70.30 per dollar. The rupee has been under pressure in recent weeks, driven by concerns over the country’s current account deficit and the ongoing trade tensions.
In conclusion, the Indian market opened steady on July 30, with traders awaiting cues from the Fed meeting and India-US trade talks. While the market is expected to remain rangebound in the near term, investors should be prepared for increased volatility in the days leading up to the MSCI rebalancing exercise.
