Sensex jumps 236 points, Nifty near 17,950; metal & IT rally

• Follow

Domestic benchmark equity indices opened with gains on Wednesday as market participants evaluated another all-time high for U.S. equities and a retreat in short-term sovereign yields ahead of the Federal Reserve policy decision. In opening trades, Sensex jumped 236 points or 0.39% to 60,265 levels. While the Nifty 50 index was quoting at 17,947 higher by 59 points or 0.33%.

“As we bid goodbye to Samvat 2077 and welcome Samvat 2078 we should expect only moderate returns for the coming year. But, as always, particular sectors and stocks will outperform and the challenge would be to identify those potential winners. Banking, an underperformer during Samvat 2077, is a potential outperformer candidate. With economic growth picking up, credit growth also is improving smartly. This augurs well for the banking sector. Top private sector banking names, a few top PSU banks and the leading NBFCs are well placed to deliver market beating returns,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The reality and metal stories appear to be multi-year upcycle stories, and therefore, might remain resilient during Samvat 2078. Construction-related stocks are likely to do well gaining from the low-interest tailwind. Segments in autos, particularly those linked to the EV space, are likely to do well. Small-caps may outperform, but this is a minefield and, therefore,investors may, ideally, exploit the opportunities in this segment by systematically investing through mutual funds, Vijayakumar added.

Gainers & losers

Sectoral strand

Barring the Nifty Auto index (down 0.05%) all other sectoral indices were trading in the green. The Nifty Metal index was shining bright as it gained 0.51% and the Nifty IT index jumped 0.49%. While Nifty IT, Nifty FMCG, Nifty Pharma, Nifty Bank and Nifty Realty indices up in the range of 0.25-0.50%.

The volatility index India VIX cooled off further by 2.79% to 16.58.

Broader markets

The broader markets mirrored the gains in benchmark indices, as the BSE MidCap index 114 points or 0.44% to 25,974 while the BSE SmallCap index was trading at 28,681 rallying 76 points or 0.27%.

Bulls overpowered bears in early session as 1,579 shares advanced compared to 655 declined while 99 remained unchanged.

Earnings today

State Bank of India, Eicher Motors, Aditya Birla Fashion and Retail, Bata India, DCM Shriram Industries, GPT Infraprojects, Grindwell Norton, Gujarat State Petronet, Gujarat Alkalies & Chemicals, Likhitha Infrastructure, Pfizer, RattanIndia Power, Sharon Bio-Medicine, and Uflex will announce their September quarter earnings today.

Global markets

Overseas, Asian stocks are trading mixed on Wednesday as investors look ahead to the end of the U.S. Federal Reserve’s two-day meeting for clues on tapering. Markets in Japan are closed on Wednesday for a holiday.

A private survey released Wednesday showed growing Chinese services activity in October, with the Caixin/Markit services Purchasing Managers’ Index coming in at 53.8, rising from September’s reading of 53.4.

Wall Street’s main indexes rose on Tuesday to record highs as a strong earnings season continued to lift sentiment for equities.

The Fed at the conclusion of its two-day meeting on Wednesday is reportedly likely to announce it will begin unwinding its $120 billion in monthly bond purchases implemented during the pandemic.