MUMBAI: Indian equity benchmarks opened on a flat note on Friday, tracking cautious global sentiment and elevated crude oil prices.
Sensex opened at 74,199.69, up 48.65 points or 0.07 per cent, while Nifty opened at 22,964.50, up 27.75 points or 0.12 per cent.
Sectoral trends in early trade were largely negative with Nifty Consumer Durables and Nifty Cement hit hardest and declined nearly 1 per cent each.
Meanwhile, Nifty Metal and MidSmall Financial Services decreased by over 0.5 per cent. FMCG, PSU bank, media, energy, real estate and chemicals sector indices were also in the red.
On the other side, Nifty IT bucked the trend and jumped more than 1 per cent, followed by pharmaceuticals and healthcare indices.
The muted start came amid weakness in US technology stocks on concerns over heavy AI-related spending and mixed corporate earnings and elevated crude oil prices.
According to market experts, “Crude headwind is getting stronger with Brent rising above $117 a barrel. There are reports of the US likely resuming strikes against Iran after the mid-term elections due on November 3.”
Even though FII selling has turned weak with occasional buys in recent days, the market construct appears unfavourable for a rally, according to them.
They further noted an interesting trend of a rally in smallcap segment after a brutal selloff last week triggered by forced liquidation of margin funded long positions. DIIs and investors are using the opportunity to buy growth stocks in this segment despite high valuations.
"However, investors should keep in mind the fact that value buying opportunities are in large-caps which are temporarily out of favour due to FII selling," the experts said.
On Thursday, FIIs turned net sellers with outflows of Rs 943 crore, snapping their two-session buying streak. In contrast, DIIs continued buying for second consecutive session with net purchases of Rs 1,924 crore.
In global markets, Asian equities declined in early hours of session as technology stocks extended losses for a second session following weaker-than-expected earnings from major US companies, dampening enthusiasm around the AI trade.
On Thursday overnight, US stocks declined as investors and traders reassessed Big Tech's heavy AI spending following key earnings and inflation data, a day after the Federal Reserve kept rates unchanged.
Crude oil prices remained elevated. Brent Crude was trading more than 1 per cent higher at $113.96 per barrel, while US West Texas Intermediate (WTI) was seen at $104.99, up over 1 per cent.