Sensex, Nifty off to tepid start as volatility keeps investors on sidelines

Selling pressure from foreign investors, coupled with uncertainty around the country's ongoing elections have kept investors jittery, with the volatility index scaling a 15-month-high for the third straight session as of Wednesday.

Among Sensex stocks, L&T, , , , , and JSW Steel were opened in the red, while M&M, Maruti, Tata Motors, SBI, and HCL Tech opened with gains.

L&T dropped nearly 5% in early trading due to lower margins in the core E&C segment and reduced revenues from its subsidiaries in Q4 results.

Bank of Baroda surged over 3% after the lender said the RBI has lifted restrictions on adding customers to its mobile application.

Sectorally, Auto surged 1.6%, driven by gains in TVS Motor, Hero MotoCorp, and Bajaj Auto. PSU Bank, Realty, and Consumer Durables also started on a positive note, whereas Nifty FMCG, IT, Media, and Pharma saw declines.

On the domestic front, investors are awaiting results from Nifty constituents State Bank of India and Asian Paints.

Experts' take
"It is important to understand that there is a new factor triggering FII selling, apart from the high US bond yields. This is the outperformance of the Chinese and Hong Kong markets. During the last one month while Nifty is down 1.5% the Shanghai Composite is up by 2.62% and Hang Seng is up by a whopping 8.8%. Chinese and Hong Kong markets are cheap with PEs around 10 while India is expensive with double the PE of these markets," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Deven Mehata, Research Analyst at Choice Broking, said, "Nifty can find support at 22,250 followed by 22,200 and 22,100. On the higher side, 22,400 can be an immediate resistance, followed by 22,450 and 22,500."

Global Markets
Asian shares were subdued on Thursday as investors awaited China trade data, while the yen steadied after three days of declines as Japan talked up a potential currency intervention.

Wall Street equities ended mostly mixed overnight.

FII/DII Tracker
Foreign portfolio investors net sold Indian shares worth Rs 6,669 crore on Wednesday, while domestic institutional investors net bought Rs 5,929 crore in stocks.

FPIs have been sellers in 21 of the last 26 sessions.

Oil Prices Rise
Oil prices rose in early trade on Thursday as shrinking U.S. crude inventories signalled tighter supply, and amid rising hopes that the Federal Reserve would cut interest rates by the end of the year.

Brent crude futures for July rose 34 cents to $83.92 a barrel. U.S. West Texas Intermediate crude for June was up 43 cents to $79.42 per barrel.

Currency Watch
The Indian rupee rose 5 paise to 83.47 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.03% to 105.5 level.

(With inputs from agencies)