Tracking cues from Asian markets, the domestic equity benchmarks opened on a positive note on Tuesday. Headline indices gained around half per cent as broader Nifty50 opened near 15,455.95 and the Sensex started near 51,897.60
Following the benchmarks, Nifty midcap and smallcap recovered from massive thrashing on Monday as they rose 0.6% and 1% respectively on Tuesday.
Sectorally, Nifty Metal gained the most as all other indices traded in the green on Tuesday morning.
A distinct trend in the market now is the weakness in the broader market, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“While Nifty 50 is down 5.6 percent during the last one month, Nifty Mid and Small- cap indices are down 9.25 percent and 12.63 percent respectively during the same period. This trend is likely to continue as long as the market remains weak,” he said
The pullback rally will be led by high-quality fundamentally strong large-caps, said Vijayakumar
The Finance ministry’s latest Monthly Economic Review warns about the stress in government’s finances caused by the rising food and fertiliser subsidies and revenue forgone from cuts in petrol and diesel taxes. “Both fiscal and current account deficits are likely to deteriorate surpassing budget estimates. This macro headwind can turn out to be a headwind for markets too, particularly if crude remains at elevated levels. Investors should seek the safety of fundamentally strong large-caps during this phase of market turbulence,” the expert added.
In the pre-open around 9.10 am, the Sensex gained over 200 points as 27 stocks advanced, one declined and two remained neutral on the 30-share index.
Earlier, all major Asian indices were trading positive in Tuesday’s early trade. SGX Nifty Futures, which hints at opening trend for the Indian market, gained over 80 points on the Singaporean exchange.
Besides, Japanese Nikkei 225 was up 1.6%, Hang Seng Index at the Hong Kong Exchange was trading higher by more than one per cent and Shanghai Composite gained 0.4% in the morning trade.