The Indian stock market traded in the green, with Sensex and Nifty extending gains from the previous session amid hopes for a diplomatic resolution to the Middle East crisis and a better-than-expected Q1 earnings season so far.
Sensex rose over 201 points to open at 78,782, while Nifty 50 gained 16 points to begin the session at 24,641. Broader markets also opened in the green, with Nifty Smallcap 100 and Nifty Midcap 100 rising up to 0.4%.
Tata Steel, ICICI Bank, IndiGo, Asian Paints, Trent, Bharti Airtel and Tech Mahindra shares gained around 1% each to lead gains on Sensex, while Power Grid, Axis Bank and Adani Ports shares fell nearly 1% to lead losses.
Among the sectors, Nifty Metal gained 0.45% to lead gains, while Nifty Auto and Nifty FMCG slipped into the red with marginal losses. The overall market breadth was positive, with NSE seeing 1,347 advances against 924 declines, while 124 stocks remained unchanged.
US President Donald Trump said talks with Iran seemed "to be working out quite well," reiterating his positive portrayal of the negotiations on the Middle East war without elaborating on the specifics of the discussions. "I hear they are doing very well," Trump said during an interview. * "I am not looking to kill people and totally obliterate everything, and that's where we were headed. And they wanted to negotiate and we're doing that, and it seems to be working out quite well," he added.
Although the war in the Middle East has entered its sixth month and the two sides have so far failed to reach a permanent end to the conflict, Trump has repeatedly attempted to portray the talks positively.
What lies ahead?
RBI’s August monetary policy, which came on expected lines, didn’t influence the market trend, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that the brief message from the policy is that rate hike is some time away, and therefore, interest elastic sectors are unlikely to be influenced by interest rates in the near-term. “However, there are interest elastic sectors like financials and autos which are doing well due to other fundamental factors. The Q1 results of financials, particularly NBFCs and automobiles signal sustained growth driven by buoyant demand conditions,” he added.
Strong sectors like pharmaceuticals and telecom have reported good results with indications of better times ahead, Vijayakumar noted, adding that although FIIs have been buyers recently, it is yet to become a strong sustainable trend. FIIs may continue to invest in small amounts, but big sustained FII inflows are unlikely since U.S. bond yields continue to remain high and may rise further, according to the analyst.
Nifty’s supports have been largely intact so far, despite consolidation and weakness, said Anand James, Chief Market Strategist at Geojit Investments. He added that this improves the odds of a strong push higher.
“While 24,775 is still the level to breach, a direct rise above 24,650 may be an early entry into a potential breakout move. This may be played with downside marker pushed higher to 24,550 for the day,” the analyst said.
