Sensex tops 56,000-mark, Nifty near 16,700

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Sensex on August 18 opened above 56,000, rising 237 points or 0.43% while Nifty50 advanced 69 points to 16,670. Fresh buying was seen in banking stocks, especially HDFC Bank, after RBI has relaxed restriction placed on sourcing of new credit cards. “The outperformance of large-caps, aided by the robust performance of IT majors, is likely to continue as the froth in the broader market is slowly getting removed. This is a healthy sign. An important trigger for the market today would be the good news for HDFC Bank. RBI’s decision to partially remove restrictions on credit card issuances by HDFC Bank would help this bluechip regain some of its lost shine. This would be favourable to Bank Nifty too which has been underperforming this year. But it is important to understand that partly the good news is already in the price since HDFC Bank is up by 6% this month, perhaps in anticipation of the positive development,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Meanwhile, retail investors continue to buy aggressively in the market unmindful of the excessive valuations, particularly in the broader market. It’s time to move over to the safety of large-caps from the over-valued mid-and small-caps, Vijayakumar added.

Gainers & losers

Sectoral strand

Sectoral indices on the NSE were mixed. Nifty Bank rose 0.60% and Nifty FMCG, Nifty Auto and Nifty Pharma indices were up in the range of 0.20-0.40%.

While Nifty IT, Nifty Metal and Nifty Realty were trading in the red.

Broader market

The broader markets were also trading higher in line with benchmark indices. The BSE MidCap index advanced 0.39% at the 23,152 level and the BSE SmallCap index was quoting at 26,370 up by 0.33%.

The market breadth was positive as 1,375 shares advanced compared to 1,030 declined and 105 remained unchanged.

Global markets

Overseas, Asian stocks are trading mixed on Wednesday as investors reacted to the Reserve Bank of New Zealand’s interest rate decision.

The Reserve Bank of New Zealand announced Wednesday that it would keep its monetary settings unchanged, leaving the official cash rate at 0.25%. In a release, the New Zealand central bank said the decision was “made in the context” of the government’s imposition of a nationwide lockdown. New Zealand Prime Minister Jacinda Ardern announced the lockdown on Wednesday following the discovery of a Covid case in Auckland.

Japan’s government on August 18 decided to extend the Covid-19 state of emergency in Tokyo and other areas to September 12, as per reports.

US stock indexes fell on August 18 as July retail sales declined and concerns about slowing global economic growth intensified.

Spending at US retailers fell sharply in July, amid cooling purchases of goods and signs of some pullback in consumer demand as U.S. Covid-19 cases tied to the Delta variant rose. Retail sales declined 1.1% in July, a reversal from June’s 0.7% increase, the Commerce Department reported Tuesday.