Shillong, September 26: Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Service, warns that the markets are likely to face ongoing pressure as U.S. 10-year treasury yields reach 16-year highs at 4.5 percent.
The Nifty index traded in a sideways manner amid subdued global cues and closed with minimal gains at 19669 levels.
As per IANS, the market sentiment has been affected by concerns about China’s real estate sector and foreign institutional investors (FIIs) reducing their holdings in domestic equities.
However, there is noticeable momentum in the auto and defensive sectors, particularly FMCG. The auto sector is expected to remain in focus as original equipment manufacturers (OEMs) plan to boost production by 25 percent in preparation for the upcoming festive season. Given the challenges in the broader markets, the FMCG sector is being viewed as a safe haven.
Investors will be closely monitoring the release of the U.S. Consumer Confidence data for September and New Home Sales figures for August later in the day, according to Khemka.
Vinod Nair, Head of Research at Geojit Financial Services, noted that trading remained relatively flat due to global market headwinds and continued selling by FIIs, which has kept domestic investors cautious. While there has been some bargain hunting in small-cap stocks following a recent correction and favorable valuations compared to large and mid-cap stocks, IT indices have declined due to concerns about potential interest rate hikes by the Federal Reserve and subsequent reductions in spending.