Opening Bell: Indices open flat; Nifty near 16,500, Sensex drops around 50 points - IndusInd Bank gains, Wipro declines post earnings

Tracking weak Asian markets, the domestic equity benchmark indices opened with marginal cuts on Thursday. The broader Nifty50 opened near 16,500, while the Sensex dropped over 50 points to start near 55,400. The barometer indices opened at 16,523.55, 55,391.93 respectively. IndusInd Bank gained almost five per cent in the opening trade after the private posted strong earnings in April-June quarter, while Wipro declined on weak numbers.  

In the broader market, Nifty Midcap and Smallcap traded flat, but with positive bias.  

Among sectoral indices, a majority of the sectors were in the red, while some buying interest was seen in Autos, FMCG, Realty and Healthcare.  

In the pre-open, the Sensex was seen trading flat with a marginal gain of 5 points and 18 stocks advanced, 11 declined and one remained unchanged on the 30-share index on Wednesday.  

"With around 8.5% rally from the June lows, Nifty is likely to consolidate around the present levels before making its next move, which will be influenced by the outcome of the ECB and Fed meetings due on 21st and 27th July respectively," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. 

He said the Fed is likely to raise the rate by 75 bp and ECB, perhaps, by 50 bp, however, more important than the rate hikes, would be commentary on the trajectory of inflation and economic growth would be closely watched.  

"If there are indications that inflation has peaked and is likely to trend down, markets would respond positively. If not, the market response would be negative," the expert said. 

He further said that from the domestic market's point of view, the biggest positive is FIIs turning buyers. "Even if they turn sellers at higher levels, the intensity of selling will be much lower than in the last several months. IT and financials which bore the brunt of FII selling are the likely beneficiaries of the change in strategy of FIIs," the expert added.  

In the pre-market commentary, Anand James, Chief Market Strategist at Geojit Financial Services, said yet another day for the bulls ended on a flat note, almost resembling an “abandoned baby” candlestick pattern.  

"While this pattern normally signals reversal, it does not look fully formed, but does point to some bullish exhaustion. That all intraday dips were consistently bought, keeps the 16800-trajectory intact, but favoured view for the day expects bears to initiate efforts to dominate, and make a play for 16330, should 16485 give away early today," he added.  

Earlier, the SGX Nifty was trading marginally higher by 20 points on the Singaporean exchange in early trade this morning.  

Japanese Nikkei 225 dropped 0.10%, Hang Seng Index declined more than 1.15% and Chinese Shanghai Composite dropped nearly half per cent on Thursday morning.  

On Wednesday US equity benchmarks Dow Jones, Nasdaq Index and S&P 500 closed higher by 47.79 points, 184.50 points and 23.21 respectively.