• The Indian stock market opened lower on Tuesday, with selling observed in several sectors.
• Despite the initial dip, the market trend remained positive with 1,263 stocks trading in green.
• Global markets are awaiting the Federal Open Market Committee outcome, with a focus on the Fed chief's commentary.
• The selling of equities by Foreign and Domestic institutional investors indicates a cautious approach due to the upcoming US Fed meet.

The Indian stock market opened in red on Tuesday, with selling observed in Nifty's PSU Bank, financial service, FMCG, and metal sectors. At around 9:33 am, the Sensex was trading at 81,548.45, declining 200.12 points or 0.24 per cent, while the Nifty was trading at 24,605.5, dropping 62.70 points or 0.25 per cent. Despite the initial dip, the market trend remained positive. On the National Stock Exchange (NSE), 1,263 stocks were trading in green, while 989 stocks were in red.

The Nifty Bank was down 133.10 points or 0.25 per cent at 53,448.25. The Nifty Midcap 100 index was trading at 59,587.30 after rising 144.25 points or 0.24 per cent. The Nifty Smallcap 100 index was at 19,575.45 after rising 44.40 points or 0.23 per cent. In the Sensex pack, Reliance, Nestle India, Bharti Airtel, JSW Steel, HDFC Bank, and Infosys were the top losers. Tata Motors, Adani Ports, Hindustan Unilever Limited, HCL, and Tech Mahindra were the top gainers.

Global Market Influence and Institutional Activity

Globally, markets were looking forward to the Federal Open Market Committee outcome on Wednesday. Markets have already discounted a 25bp rate cut and, therefore, the focus will be on the Fed chief's commentary, said experts. The US services PMI coming strong at 58.5 per cent indicates a resilient economy, which augurs well for the market.

In the Asian markets, except Japan, the markets of China, Hong Kong, Bangkok, Seoul, and Jakarta were trading in red. In US stock markets, the Nasdaq Composite and S&P 500 ended 1.24 per cent and 0.38 per cent higher respectively, and Dow Jones Industrial Average ended 0.25 per cent down in the previous trading session.

Foreign institutional investors (FIIs) sold equities worth Rs 278.70 crore in India on December 16, while domestic institutional investors sold equities worth Rs 234.25 crore on the same day. This indicates a cautious approach by investors, possibly due to the upcoming US Fed meet and its potential impact on global markets.

Historical Similarities and Market Outlook

Historically, similar events have occurred where the market opens lower due to various factors but manages to maintain a positive trend. For instance, in the run-up to the 2019 general elections in India, the markets were volatile due to uncertainties but managed to stay positive due to strong fundamentals and positive global cues.

The current market scenario also reflects the interplay of various factors such as sectoral performance, global cues, and institutional activity. The performance of different sectors such as PSU Bank, financial service, FMCG, and metal sectors shows the diverse nature of the market and the varying impact of macroeconomic factors on different sectors.

The global cues, particularly the anticipation around the US Fed meet, show the interconnectedness of global markets and the influence of major economies on global market trends. The institutional activity, as indicated by the selling of equities by FIIs and domestic institutional investors, reflects the sentiment of major market players and their outlook towards the market.