Markets open higher on FII buying, trade war optimism
Equity markets opened higher on Wednesday, extending gains from the previous session, as foreign institutional investors (FIIs) turned net buyers after 23 consecutive sessions of selling, while optimism grew over potential easing of US-China trade tensions.
The Sensex opened at 78,704.60 compared to its previous close of 78,583.81 and is currently trading at 78,657.27, up by 73.46 points or 0.09 per cent. Similarly, the Nifty opened at 23,738.40 against its previous close of 23,739.25 and is now at 23,792.20, gaining 52.95 points or 0.22 per cent.
“The most significant short-term positive for the market is FIIs turning buyers in the cash market for the first time since January 2nd,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. FIIs bought equities worth ₹809 crores on Tuesday, while domestic institutional investors (DIIs) sold shares worth ₹430 crores.
Oil & gas stocks led the gains, with BPCL surging 3.32 per cent and ONGC rising 2.44 per cent. Among other top gainers were IndusInd Bank (+1.97 per cent), Coal India (+1.51 per cent), and Tata Motors (+1.40 per cent). Consumer stocks faced selling pressure, with Asian Paints dropping 4.39 per cent, followed by Nestlé India (-2.59 per cent) and Titan (-1.83 per cent).
“Nifty-50 has broken on the higher side with strong up move near to 23,800 levels and now the round number of 24,000 will act as strong resistance from current levels,” said Vikas Jain, Head of Research at Reliance Securities. He noted that Bank Nifty continued to outperform broader markets, led by PSU Banks.
Hardik Matalia, Derivative analyst at Choice Broking, suggested caution amid expected volatility: “After remaining net sellers for 23 sessions, the FIIs turned net buyers on February 4. Traders should remain cautious as high volatility is expected. However, buying on dips can be considered as long as the Nifty index holds above 23,300.”
“The current market texture is bullish, and buy on intraday dips and sell on rallies would be the ideal strategy for day traders,” advised Shrikant Chouhan, Head of Equity Research at Kotak Securities. He identified 23,600/78100 and 23,500/77800 as key support zones.
VLA Ambala, Co-Founder of Stock Market Today, warned about potential headwinds: “Crude oil prices slumped by 2 per cent, and the INR was trading at a record low of 87.15. These issues could potentially trigger inflation and affect our manufacturing sector by increasing their fixed cost burden.”
The market sentiment was boosted by US President Trump’s decision to delay tariffs on Mexico and Canada, though concerns remained as China announced retaliatory tariffs on US goods. Gold prices hit a record high of $2,848 per ounce as investors sought safe-haven assets amid trade tensions. Crude oil steadied at $76 per barrel after initial declines.
Investors are closely watching the Reserve Bank of India’s monetary policy committee meeting, which begins today, with expectations of a potential rate cut following Finance Minister Nirmala Sitharaman’s emphasis on boosting consumption in the Union Budget 2025-26.
Key companies scheduled to announce their quarterly results today include Info Edge, Zydus Lifesciences, Swiggy, and Cummins India. Market participants will also focus on banking, real estate, auto, and NBFC stocks ahead of the RBI’s policy announcement on Friday.