The Nifty and Sensex opened flat on Friday due to FPI volatility in Indian markets. The pharma and healthcare sector saw a decline. Experts say that the turmoil in global bond markets is changing the attitude of FPIs, increasing uncertainty in the market.
On Friday, Indian benchmark indices experienced volatility, primarily because of unpredictable foreign portfolio investor (FPI) actions. The Nifty 50 index started 29.80 points or 0.12 percent higher at 24,639.50, while the BSE Sensex opened slightly lower by 55.48 points or 0.07 percent at 80,896.51. Analysts attributed the market's current volatility to disruptions in global bond markets. FPIs frequently alter their approach, purchasing equities one day and selling them the next, contributing to uncertainty in Indian markets.
Banking and market expert Ajay Bagga told ANI, "Indian markets are seeing huge fluctuations in FPI inflows, large amounts of withdrawals in a day, then large amounts of investment and then large amounts of withdrawals. Clearly, FPIs are nervous about the turmoil in the global bond market and some are already making withdrawals. This is a pressure on a market that is benefiting from several domestic favourable conditions. As global sentiment improves, we can expect the Indian markets to benefit from the domestic focus. Despite a flat start overall, broader market indices were in the green.
The Nifty Next 50 increased by 0.18 percent, and the financial services index saw a rise of 0.06 percent. The Nifty Bank index started flat but stayed positive, while both the Nifty Midcap and Nifty Smallcap indices traded positively. Except for Nifty Pharma and Nifty Healthcare, all sectoral indices opened with gains. Nifty Auto went up by 0.29 percent, Nifty FMCG by 0.76 percent, and Nifty IT by 0.16 percent. Nifty Media was also in positive territory with a 0.1 percent gain. The Nifty metal climbed by 0.28 percent at the start of the session.
In the opening session, Grasim, Trent, ITC, BEL, and SBI Life were among the top gainers, whereas Sun Pharma, Dr Reddy's, M&M, Titan, ONGC, and Cipla were the major losers. Specifically, Grasim saw a 9.2% year-on-year rise in its Q4 FY25 profit, reaching Rs 1,495.9 crore. Sun Pharma's FY25 revenue increased by 8.4% to Rs 52,578.4 crore. On the institutional side, foreign institutional investors (FIIs) offloaded shares worth Rs 5,045 crore in the cash market on May 22, while domestic institutional investors (DIIs) purchased shares amounting to Rs 3,715 crore.
Worldwide, the enactment of the US Tax and Expenditure Bill has strengthened significant economic strategies during Trump's second term. Nonetheless, this has led to market anxiety concerning the fiscal deficit and increasing long-term bond yields. Specialists anticipate that once the market comprehensively grasps its impacts, the situation will be resolved.