Source : INDIA TODAY NEWS
Bbenchmark indices opened higher on Wednesday, but persistent foreign investor selling and elevated crude prices kept sentiment cautious. The recovery came after a sharp two-session sell-off, with broader markets and several key sectors showing strength.
The Sensex was up 184.53 points, or 0.25%, at 72,713.60 at 9:25 am, after opening at 72,441.15. The Nifty 50 was at 22,734.05, up 17.85 points, or 0.08%, after opening at 22,665.
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The broader market was stronger, with Nifty Midcap 50, Midcap 100 and Smallcap 100 rising 0.80%, 0.96% and 1.01%, respectively. The Nifty 100 gained 0.26%, while the Nifty 500 was up 0.50%.
IT, PSU BANKS LEAD THE RECOVERY
Most sectors opened higher, with Nifty IT rising 1.56%, PSU Bank gaining 1.58%, Media up 1.92%, Oil & Gas rising 1.53% and MidSmall IT & Telecom gaining 2.43%.
Auto, Realty, Private Bank and Financial Services Ex-Bank indices also traded in positive territory. Nifty Chemicals was up 2.02%.
However, Pharma and Healthcare remained under pressure, falling 0.67% and 1.04%, respectively.
Among Sensex stocks, TCS rose 2.36%, while IndiGo gained 1.77%, Tech Mahindra 1.50%, HCLTech 1.22%, ICICI Bank 1.08% and Reliance Industries 0.97%.
On the other hand, Sun Pharma fell 1.41%, Adani Ports declined 1.27% and HDFC Bank was down 0.94%.
FII SELLING REMAINS A KEY CONCERN
The gains come against the backdrop of heavy foreign investor selling. Foreign investors sold Indian shares worth Rs 9,980 crore on Tuesday, their biggest outflow in about four months.
They have now sold around $2.7 billion worth of Indian equities in September, taking their year-to-date selling to $26.75 billion.
Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said the sharp correction in September was mainly triggered by elevated crude prices and high US bond yields, with the sell-off becoming more intense as FIIs turned heavy sellers.
“During the last four trading days FIIs sold equity for Rs 24,054 crores- massive selling. In the context of the 10-year US bond yields hovering around 5.2%, this FIIs selling is a rational act,” he said.
Vijayakumar, however, said the sharp correction has created opportunities in some large-cap segments.
“Large-caps with good growth prospects have reached attractive valuations. This is a value buying opportunity. In segments like financials, particularly large banks, capital goods, telecom and automobiles, there are good buying opportunities,” he said.
CRUDE OIL STILL IN FOCUS
Crude oil remains an important market trigger. Brent crude was at $103.43 a barrel, up 0.82%, while WTI crude rose 0.37% to $89.71.
Brent had fallen sharply in the previous session, but prices rose again after US President Donald Trump denied that he would be willing to ease sanctions on Iran. The absence of a US-Iran peace deal continues to keep markets on edge.
Vijayakumar said a correction in crude prices could trigger a rally in Indian equities.
“Correction in crude prices can trigger a rally in the market and when that happens these large-caps might lead the rally,” he said.
For the near term, investors will track crude prices, FII flows and global bond yields, while the market’s ability to hold above key levels will remain important after the recent correction.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)
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SOURCE :- TIMES OF INDIA
