Sensex, Nifty Open Flat As Investors Track F&O Closing Auction, FII Flows

Indian benchmark indices opened on a subdued note on Monday as investors assessed the impact of the National Stock Exchange's (NSE) new Closing Auction Session (CAS) for F&O stocks, alongside sustained foreign institutional investor (FII) buying and firm global cues.

At 9:15 a.m., the Sensex was up 41.47 points, or 0.05%, at 78,540.64, while the Nifty 50 slipped 7.55 points, or 0.03%, to 24,563.10.

Market participants remained focused on the implementation of the new Closing Auction Session, introduced for F&O stocks from August 3, after sharp price swings were witnessed during its initial rollout last week.

Asian Markets, FII Inflows Support Sentiment

Asian markets traded higher in early trade, rising between 0.5% and 2%, providing support to investor sentiment.

Foreign portfolio investors also remained net buyers, investing ₹12,920 crore in Indian equities through August 7. However, elevated US bond yields continue to pose a risk to the pace of overseas inflows into emerging markets.

Investors are also tracking developments in the Middle East, particularly around the Strait of Hormuz, along with the upcoming July US inflation data, which could provide fresh clues on the US Federal Reserve's policy trajectory.

Crude Oil Rebounds

Oil prices rose more than 1% after uncertainty surrounding the reopening of the Strait of Hormuz resurfaced.

Brent crude advanced 1.32% to $84.65 a barrel, while US West Texas Intermediate (WTI) crude gained 1.04% to $78.99 a barrel. The rebound followed a decline of more than 7% last week, when hopes of an agreement between Iran and Oman to resume shipping through the strategic waterway had weighed on prices.

Crude oil remains a key variable for Indian markets as higher energy prices can influence inflation, corporate profitability and the country's external balance.

Sectoral Trends

Sectoral rotation remained evident in early trade, with auto, IT, metal and PSU bank stocks outperforming. Realty, private banks and financial services stocks witnessed profit booking.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market's undertone remains mildly bullish, supported by better-than-expected June-quarter earnings.

He said a majority of companies have reported earnings growth above expectations, while resilient domestic demand is likely to continue supporting revenue and profit growth in the September quarter.

According to Vijayakumar, banking and financial services, automobiles, pharmaceuticals, metals and digital platform companies are expected to remain resilient despite headwinds such as a deficient monsoon, which has been partly offset by good rainfall in July.

He added that sustained FII buying since July remains another positive factor supporting the market's resilience.