The Indian market opened on a strong note amid weak global cues on Wednesday. The benchmark indices opened higher by nearly half per cent in line with the SGX Nifty trends. The broader Nifty50 opened above 16,100 while the Sensex gained almost 400 points as the indices started at 16,128.20 and 54,210.10 respectively.
In the broader market, Nifty Midcap and Smallcap traded by around 0.8% each as India VIX remained near 18-mark
Among sectors, all Nifty sectoral indices were in the green in the opening trade. Nifty PSU Bank, which gained more than one per cent, was the top performing index.
“The major positive development from India’s economic and market perspective is the crash in Brent crude to below $ 100 for the first time since March 22. The bulls are likely to latch on to this good news. But FIIs again turning sellers will be a dampener,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Vijaykumar said that the market direction will be set by the US market move today which, in turn, will be determined by the CPI inflation data for June to be released today. “June CPI inflation is expected to touch 8.8 % YoY. If the actual numbers and indications are below expectations, markets will stage a rebound. Conversely, if the actuals are higher than expectations, there can be a further sell-off impacting markets globally. So, watch out for the US inflation numbers,” the expert said.
An important short- term trend playing out in the market is the weakness in IT and strength in banking, he observed. “IT is weak on margin pressure in the industry and fears of a possible US recession fallout. Banking is strong due to the strong fundamentals of the banking segment and the impressive credit growth underway in the economy,” he added.
Having slipped to 16040 on anticipated lines, we would be comfortable seeing it getting extended to 15950 before a more sustainable upswing could be played, said Anand James – Chief Market Strategist at Geojit Financial Services. “But having retraced almost240 points from the recent top, it is fair to expect a swing back higher, though low vix could again limit the possibilities of a clean breach of 16150 which had held firm on anticipated lines, yesterday as well,” he added.
In the pre-open, the Sensex rose higher by more than 300 points to 54,209.73 around 8 am on Tuesday as 23 stocks advanced, four declined and three remained unchanged on the 30-share index.
Earlier, SGX Nifty, which indicates opening trends for the domestic market, was trading higher by more than 50 points on Wednesday morning.
Similarly, Japanese Nikkei 225 rose higher by 0.37% and Hang Seng Index at the Hong Kong exchange gained 0.3% around the same time. Chinese Shanghai Composite decline 0.25% on Wednesday morning.
On Tuesday, the US market closed deep in the red as Dow Jones declined by 0.62%, Nasdaq 0.95%, and S&P 500 closed lower by 0.92% amid weakness in the US market.