Source : INDIA TODAY NEWS
Benchmark indices opened on a cautious note on Wednesday, attempting to stabilise after Tuesday’s sharp selloff, as lower crude oil prices and a rebound in technology stocks helped offset concerns over a hawkish US Federal Reserve and weak global market sentiment.
The S&P BSE Sensex rose 113.27 points to 76,313.95 in early trade, while the NSE Nifty50 gained 22.15 points to 23,845.50 as of 9:22 am.
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The recovery comes a day after the Sensex plunged 893 points and the Nifty lost nearly 279 points amid heavy selling in IT and metal stocks.
IT STOCKS LEAD THE RECOVERY
Technology shares, which bore the brunt of Tuesday’s selloff, emerged among the top gainers in early trade.
Tech Mahindra climbed 2.70%, Infosys rose 1.46% and TCS gained 0.65%, helping the Nifty IT index advance over 1%.
The rebound followed a recovery in South Korean markets after Tuesday’s sharp correction in semiconductor stocks sparked fears of a broader technology-led selloff across Asia.
According to Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, excessive volatility in semiconductor-heavy markets such as South Korea and Taiwan is likely to continue, but India’s relatively stable growth profile makes it comparatively resilient.
CRUDE OIL FALL OFFERS RELIEF
One of the biggest positives for Indian equities continues to be the sharp correction in crude oil prices.
Brent crude slipped below $77 a barrel, extending losses after signs emerged that oil tanker movement through the Strait of Hormuz was normalising amid ongoing US-Iran peace negotiations.
For India, a major oil importer, lower crude prices help reduce inflation risks, improve the current account balance and support corporate earnings.
Vijayakumar said the collapse in Brent crude has effectively removed one of the biggest macroeconomic headwinds facing the Indian economy.
PHARMA STOCKS ATTRACT BUYING
Defensive sectors also remained in demand.
The Nifty Pharma index rose 0.88%, while the Nifty Healthcare Index gained 0.77%.
Sun Pharma was among the notable gainers on the Sensex, rising 0.48%.
Market participants are increasingly viewing pharmaceutical stocks as relatively insulated from concerns around monsoon variability and rural demand.
While benchmark indices traded in positive territory, broader market participation remained mixed.
The Nifty Midcap 50 rose 0.21%, while the Nifty Midcap 100 was up just 0.05%.
The Nifty Smallcap 100 slipped marginally into the red.
Among sectoral indices, Nifty IT, Pharma and Private Banks traded higher, while Auto, Media and Consumer Durables witnessed mild weakness.
MONSOON REMAINS A KEY CONCERN
Despite improving global and commodity-related cues, investors remain cautious about the progress of the southwest monsoon.
India’s monsoon rainfall remains significantly below normal so far this season, raising concerns over rural demand, agricultural output and inflation.
Vijayakumar warned that sectors dependent on rural consumption, including FMCG companies and entry-level two-wheeler manufacturers, could face pressure if rainfall deficiencies persist.
Going ahead, investors will closely monitor monsoon progress, foreign institutional investor activity and signals from the US Federal Reserve.
While lower crude prices, a stable rupee and moderating foreign outflows continue to support sentiment, concerns around global growth and domestic weather conditions are likely to keep markets range-bound in the near term.
(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.)
– Ends
SOURCE :- TIMES OF INDIA
