The BSE Sensex on Friday jumped 630 points or 0.8 per cent to 79,737.4 in the opening trade, while the NSE Nifty rose 186 points or 0.77 per cent at 24,330.25.
The domestic equity market on Friday showed an impressive opening amid positive global cues. The BSE Sensex on Friday jumped 630 points or 0.8 per cent to 79,737.4 in the opening trade, while the NSE Nifty rose 186 points or 0.77 per cent at 24,330.25.
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Mahindra & Mahindra, Tata Motors, Tech Mahindra, JSW Steel, and TCS are the top gainers in the early trade today. Only PowerGrid was in the red among the Sensex’s 30 shares.
V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, “Globally stock markets have turned around smartly from the August 5th sell off triggered by US recession fears and the unwinding of the yen carry trade. Latest data on US inflation and unemployment relief do not indicate an economy tipping into recession. On the other hand, the 2.9% annual inflation number and slightly softening labour markets set the stage for a Fed rate cut in September, which the market is pencilling in now. The sharp dip in CBOE VIX to around 15% indicates that the fears were overdone and stability is the near-term trend.”
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In India we have the paradox of exuberant retail investors and cautious institutional investors. The former is not much concerned about the elevated valuations of the market while the latter are increasing their cash component on valuation concerns. Investors should give priority to valuations in their fresh investment. The broader market doesn’t have valuation comfort, he added.
Prashanth Tapse, senior vice-president (research), Mehta Equities Ltd, said, “Nifty is poised for a potential uptick as bulls look to capitalise on positive momentum from Wall Street. Traders are likely to adopt a risk-on approach, driven by strong cues from Wall Street, the expectation of a rate cut by the Federal Reserve in September, and robust US retail sales figures, which have eased recession concerns. The July US CPI data further boosts confidence that inflation will return to the Fed’s 2% target. However, risk appetite is expected to improve significantly only above the Nifty 24,497 mark.”
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In Wednesday’s session, FIIs were net sellers by Rs 2,595 crore, while DIIs bought Rs 2,236 crore. Nifty options data suggests a trading range of 24,000-25,000, with 25,000 acting as a key resistance level.
“Key stocks to watch include Aurobindo Pharma, Bajaj Auto, Naukri, and TVS Motors, with a bullish outlook on Aurobindo Pharma for the month,” Tapse said.
