Markets open flat amid global uncertainty; SEBI clarifications on ODIs expected to stabilize sentiment

Mumbai (Maharashtra) [India], December 18 : The stock market opened flat in negative territory on Wednesday, reflecting cautious investor sentiment following a sharp sell-off on Tuesday.
The BSE Sensex declined by 110.20 points to 80,574.26, while the NSE Nifty dipped 23.70 points to 24,312.30. Among Nifty companies, 19 advanced, while 30 recorded declines.
Leading the gains were Sun Pharma, Dr. Reddy, Shriram Finance, Wipro, and HCL Technologies, while Tata Motors, Power Grid, Maruti, BEL, and Larsen & Toubro (L&T) were among the top losers, pulling the indices down.
Ajay Bagga, a banking and marketing expert, attributed Tuesday's sell-off to the SEBI circular on Offshore Derivative Instruments (ODIs) issued by Foreign Portfolio Investors (FPIs).
He stated, "Indian markets saw a big sell off by FPIs on Tuesday on the back of the SEBI circular on ODI issuance by FPIs. This morning, SEBI has clarified that the restrictions are on ODIs based on derivatives as underlying. Cash market securities as underlying are allowed as at present for ODI issuance by FPIs. This should assuage market sentiment."
"SEBI has also clarified that there are no ODIs outstanding which use derivatives as underlying. Indian markets are at heavily oversold levels and expect a bounce back today. It is Fed rate cut announcement day, so positions will be muted going into a major event like this. We expect better markets later in the week once the Fed and BOJ meets are out of the way," he added.
Bagga predicted a potential recovery, noting that Indian markets are at "heavily oversold levels."
Akshay Chinchalkar, Head of Research at Axis Securities, highlighted key technical levels and patterns influencing the Nifty's movements, "Nifty's decline yesterday was the biggest since 28th November, with yesterday's low occurring right at a trendline originating from the 23263 lows of November 21st."
He added, "Additionally, from an Elliott wave perspective, a bullish triangle remains intact as long as the index stays above the Friday low of 24180 which has the potential to send prices to 25000. Bears will get the upper hand below 24180, under which 23873 comes into focus."
The markets are likely to remain cautious in the lead-up to key global events, including policy announcements from the Federal Reserve and the Bank of Japan.
Analysts expect volatility to taper off post-clarifications and anticipate a potential bounce-back driven by improved market sentiment and global cues.
Investors will closely monitor developments in SEBI's regulatory stance, global interest rate decisions, and FPI activities for further cues on market direction.