The domestic benchmark indices opened mildly in red on Tuesday but acquired momentum and trimmed initial losses as the trading session progressed. However, the market might experience muted intra-day momentum as indices shift between gains and losses.
The world economy is marred by recessionary pressure, covid fears, a slowdown in China and tightening monetary policy stance by central banks worldwide. The perfect storm of unfavorable economic conditions weighed heavily on the stock market in 2022.
Despite global headwinds, the Indian economy shows signs of resilience and so does its stock market. The latest Purchasing Managers' Index (PMI) data for December shows a significant rise in manufacturing activity. The PMI reading for December rose to 57.8 from the previously recorded 55.7 in November.
The BSE Sensex opened at 61,074 points, almost 100 points lower than the previous close; meanwhile, Nifty-50 began trading at 18,163 points, around 30 points down from the previous close and Bank Nifty opened 50 points lower to 43,151 points.
As of 00:00, Sensex and Nifty are mildly trading in green at 61,198 points and 18,208 points, respectively. Bank Nifty is trading close to the 43,300 mark.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, "The major factor weighing on equity markets is the global economic slowdown expected this year. The Chinese PMI data for December at 47 indicates a sharp deceleration of the Chinese economy and reinforces the global slowdown theme. Though this is a near-term negative for global equity markets, India is likely to shrug off this negative news since India's economic outperformance is expected to continue."
Commenting on a Nifty outlook Vaishali Parekh, vice president - technical research, Prabhudas Lilladher Pvt. Ltd said, "Nifty has maintained the 18000 zone as the strong support as of now and currently, some consolidation is witnessed hovering near the significant level of 50EMA moving average with the 18250-18300 band acting as the crucial resistance zone above which the bias and sentiment would further improve and can anticipate for fresh upward move to retest the previous peak zone near 18900 levels."
Global, as well as domestic cues will shape the likely course of the Indian equity market in the year 2023. This year is crucial not just for the market but for the economy at large and further monetary steps taken by central banks around the world will be closely watched by investors.
