Sensex jumps 235 points in early trade, Nifty above 15,750; realty stocks rally
Barring the Nifty IT all other sectoral indices were trading in the green on the NSE
Indian equity benchmarks opened higher on Tuesday tracking a positive trend in global markerts. In early trade, Sensex jumped 235 points or 0.45% at 52,607, while Nifty 50 advaned 75 points or 0.48% at 15,767. However, the gains could be capped given a sequential dip in industrial production in May and high June retail inflation.
“The global stock market rally continues unabated with the Dow, Nasdaq, S&P 500, and the pan European Stoxx 600 again setting new record highs. Markets are currently ignoring valuation concerns. The fact that 583 stocks, mostly mid and small-caps were locked in the upper circuit yesterday is an indication of the frenzied retail activity in markets. From a conservative investment perspective, these are warning signals. Meanwhile, the news from the inflation front is positive with June CPI coming at 6.26% against an expectation of 6.5%. This gives room for the RBI to continue on the accommodative mode further strengthening the bulls. While remaining invested in high-quality stocks investors should not be carried by the exuberance in the market, particularly in small-caps,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Gainers & losers
As many as 25 of 30 Sensex stocks opened in the green. NTPC, ICICI Bank, HDFC, Sun Pharma and Tata Steel were among the top gainers on the Sensex. Tech Mahindra, HCL Tech, Infosys, HUL and Maruti were among the laggards.
Sectoral strand
Barring the Nifty IT all other sectoral indices were trading in the green on the NSE. Nifty Realty, up 1.46% was leading the sectoral pack followed by Nifty Auto, Nifty Bank, Nifty Metal and Nifty Pharma, adding up to 1%.
Broader markets
In the broader market, the BSE MidCap index advanced 0.11% at 22,929 while the BSE SmallCap index touched an all-time high of 26,263 and was trading at 0.45%.
The market breadth was also strong as 1,309 stocks advanced while 504 shares declined and 450 scrips remained unchanged.
Economy
On the macro front, the country’s retail inflation, measured by the Consumer Price Index (CPI), eased marginally to 6.26% in the month of June. Separately, India’s factory output, measured in terms of the Index of Industrial Production (IIP), witnessed a year-on-year growth of 29.3% in May, two separate data released by the Ministry of Statistics & Programme Implementation (MoSPI) showed on Monday. The retail inflation during the month of May was at 6.30%. The IIP had crashed (-)33.4% on-year to 90.2 in May 2020, the data showed. This was mainly due to the nationwide lockdown which was imposed last year to curb the first wave of coronavirus (Covid-19) pandemic.
Earnings today
Mindtree, Tata Metaliks, Deccan Health Care, Gagan Gases, Shree Ganesh Remedies, TPI India, and WS Industries are slated to announce their April-June quarterly earnings today.
Global markets
Overseas, Asian stocks are trading higher on Tuesday as investors awaited the release of China’s trade data for June.
Wall Street’s main indexes rose on Monday, with the Nasdaq and the S&P 500 hitting record highs as investors awaited the start of the second-quarter earnings season and a batch of economic data to gauge the next leg of the equity market.
Investors appeared cautiously optimistic ahead of the start of second-quarter earnings reports. Investors also anticipate important data to be released this week, including key readings on inflation on Tuesday and Wednesday, and June retail sales on Friday.
Federal Reserve chair Jerome Powell is set to testify before Congress on Wednesday and Thursday, and investors will be looking for any signals of fiscal policy updates.