The S&P BSE Sensex added 336 points, or 0.4%, to open at 81,123.32, while the NSE Nifty 50 rose 99.80 points, or 0.4%, to 24,872.95. At 9:36 AM, BSE traded 246 or 0.3% higher at 81,033, whereas Nifty50 rose 77 points to 24,850.
On the 30-stock Sensex, Infosys, Tech Mahindra, Adani Ports, HDFC Bank and L&T led the advance, rising between 0.7% and 4%.
On a sectoral basis, IT shares gained up to 2%, led by a nearly 4% rise in Infosys after the company said it would consider a share buyback.
Investor wagers on a Federal Reserve rate cut at its September 16-17 meeting strengthened after U.S. data showed August job growth came in weaker than expected.
Broader indexes also firmed, with mid-cap stocks up 0.2% and small-caps higher by 0.3%.
Expert Views
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, said the market is “slowly regaining momentum on expectations of an earnings boost from GST reforms,” with autos emerging as the key beneficiaries of the tax cuts. He said that “news of huge demand for automobiles post-September 22 will keep auto stocks resilient despite the recent run up.”On global cues, Vijayakumar noted that while the Nasdaq’s record highs are supportive for U.S. equities, “there are clear signs of rising inflation and unemployment in the U.S.” As a result, he expects the Federal Reserve to pause after a 25 basis point rate cut on September 17, making its commentary critical for market direction.
“The underperformance of the broader market is a distinct trend now,” Vijayakumar said, highlighting that the Nifty has slipped 0.65% over the past year, compared with declines of 1.9% and 8.08% in the Nifty Midcap 150 and Nifty Smallcap 100, respectively. “High valuations in the smallcap segment are getting corrected. The fair valuations in the largecap segment can keep it resilient, while midcaps, though expensive, are being supported by superior earnings growth,” he said.
In technical terms, Anand James, Chief Market Strategist at Geojit Investments said the upside momentum vanished on test of 24,870, “which we had pencilled in as a critical pivot yesterday. Though the turn lower thereof was abrupt and steep, oscillators remain accommodative towards further upsides. We will look for a close beyond the 24,730-870 for further clarity.”
Global Markets
Asian equities edged higher Tuesday on rising expectations the Federal Reserve could cut rates as soon as next week, though political turmoil worldwide kept currency and bond markets unsettled.
MSCI’s broad gauge of Asia-Pacific shares outside Japan climbed 0.2% in early trade, tracking Wall Street’s advance overnight that sent the Nasdaq to another record close. Nasdaq futures added 0.06%, while S&P 500 futures ticked up 0.05%.
Traders are now assigning just over a 10% probability to a half-point Fed rate cut this month, up from zero a week earlier, according to the CME FedWatch tool cited by Reuters.
European futures slipped after Monday’s gains in cash trading, with Euro Stoxx 50 futures down 0.17%, FTSE futures off 0.04% and DAX futures lower by 0.22%.
Japan’s Nikkei rose nearly 1%, helped by a weaker yen and following the resignation of Prime Minister Shigeru Ishiba, known for his fiscal conservatism.
In commodities, spot gold hit a fresh record of $3,647.23 an ounce, lifted by growing bets on imminent Fed easing.
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FII/DII Tracker
On the institutional front, Foreign Institutional Investors (FIIs) sold equities worth a little over Rs 2,170 crore on September 08, while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 3,014 crore.
