Sensex jumps 300 points at open, Nifty tops 17,200; banks, realty stocks rally

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Benchmark equity indices opened at record highs on September 1 as investors react to GDP numbers released by the government on Tuesday after market hours. At 10 am, Sensex was at 57,890.97, up 338.58 points or 0.59%, while Nifty advanced 82.95 points or 0.48% to a new high of 17,215.15.

Gainers & losers

Sectoral strand

Most sectoral indices opened in the green on the NSE. Nifty Private Bank, rising over 1.5% was the top sectoral gainer followed by Nifty Realty, Nifty Bank, Nifty Financial Services and Nifty PSU Bank. Nifty Metal, Nifty IT and Nifty Pharma were in the red.

Broader market

Broader markets outperformed benchmark indices. The BSE MidCap index opened at record highs of 24,059 advancing 206 points. The BSE SmallCap index regained 27,000-mark and was trading at 27,078 up by 158 points or 0.59%.

However, the market breadth turned positive as 1,602 shares advanced compared to 646 declined and 97 remained unchanged.

Sebi’s margin rule

Market regulator Securities and Exchange Board of India’s (SEBI) new margin rules will come into effect from Wednesday (1 September 2021). Under the new peak margin rule, traders will be required to give 100% margin upfront for their trades. As per the new peak margin norms, the margin requirements will be calculated four times during every trading session. It will also include intraday trading positions. The peak margin norms were introduced last year to curb speculative trading and restrict leverages offered by stockbrokers to their clients.

Economy

India’s real gross domestic product (GDP) grew by 20.1% in the April-June quarter of the fiscal year 2021-22, a record quarterly print on the back of a low base last year, data released on August 31 showed. GDP contracted by 24.4% in the April-June quarter in FY2021 as the country went into a lockdown to curb the spread of the coronavirus.

The output of eight core sectors grew by 9.4% in July, mainly due to a low base effect and uptick in production of coal, natural gas, steel, cement and electricity, official data showed on Tuesday.

Global markets

Overseas, Asian stocks are trading mixed on Wednesday, as a private survey showed shrinking Chinese factory activity in August. The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) fell to 49.2 last month, from 50.3 in July, breaching the 50-mark that separates growth from contraction.

US stocks ended slightly lower Tuesday as investors looked ahead to US jobs data for August coming Friday, where they might find clues as to when the Federal Reserve may begin tapering its bond purchases which have helped to support markets during the pandemic.