Sensex opens above 60,000, Nifty at 17,940; IT stocks rally

Domestic benchmark equities indices opened with strong gains on Friday after U.S. shares rallied and sovereign bond yields surged on economic optimism and easing fears of contagion from China Evergrande Group’s debt crisis. In opening trades, Sensex crossed the 60,000-mark surging 348 points or 0.58% to record highs of 60,233 while the Nifty 50 index touched a new peak of 17,940 higher by 117 points or 0.66%.

“Sensex@60000 a milestone would be quite an achievement in these Covid times and a shot in the arm for bulls who are in total control of this market. The outperformance of India during September so far is stunning with MSCI World Index down 2.13 % and Nifty up by 4.03%. The poor performance of the Shanghai Composite due to regulatory crackdown and the China Plus One policy have again made India an attractive investment destination for FIIs,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

But the market exuberance has pushed valuations to very high levels. India’s valuation premium to EM peers is above 80% now. This is difficult to sustain. Investors may think of reducing portfolio risk by moving to the safety of high-quality large-caps. Partial profit booking in the mid and small-cap segment and moving some money to fixed income also may be considered, added Vijayakumar.

Gainers & losers

Top gainers & losers on the Sensex.

Sectoral strand

All sectoral indices opened mixed on the NSE. Nifty IT index skyrocketed 2.41% followed Nifty Realty index jumped 0.73%, Nifty Bank index rose 0.69%, Nifty Pharma gained 0.42% and Nifty Auto index was up 0.24%.

On the downside Nifty Media lost 1.07%, Nifty Metal index declined 0.74% and Nifty FMCG index was down with marginal losses of 0.07%.

Broader markets

Broader markets were trading higher but underperformed the benchmark indices as the BSE MidCap advanced 24 points or 0.10% to 25,507 while the BSE SmallCap index was quoting at 28,232 up by 138 points or 0.49%.

The market breadth was positive as 1,597 shares advanced compared to 850 declined and 110 remained unchanged.

Global markets

Overseas, Asian stocks are trading mixed on Friday even as U.S. shares rallied overnight and easing fears of contagion from China Evergrande Group’s debt crisis. Although investors breathed a sigh of relief as concerns over China Evergrande’s debt woes receded somewhat, it remains unclear if and how the developer will pay the more than $300 billion of liabilities that it owes.

U.S. stocks gained more than 1% on Thursday as fears around a crisis in China’s property market eased somewhat and as the Federal Reserve kept the current monetary stimulus in place for just a little bit longer.

The Bank of England on Thursday maintained its stimulus amount and record-low interest rate, even as it warned that UK annual inflation would top 4% this year. The BoE ‘s nine-strong monetary policy committee (MPC) voted unanimously to hold its key borrowing cost at 0.1%, a statement said. Policymakers voted 7-2 in favour of keeping its so-called quantitative easing stimulus at almost £900 billion ($1.2 trillion, 1 trillion euros).