Domestic equity markets opened on a higher note on Wednesday, tracking the firm cues from the Asian markets. Indian headline peers shrugged off the overnight weakness in the US stocks. However, the bout between bulls and bears may continue, lifting volatility at Dalal Street.
The Bank of Japan on Wednesday maintained ultra-low interest rates, keeping them unchanged. Other positive catalysts including cooling inflation, China reopening and the US dollar at 7-month low would lift the mood of the markets.
At 9.20 am, the 30-share pack BSE Sensex was trading 107 points or 0.17 per cent higher at 60,763, whereas NSE's Nifty50 index was up by 37.25 points or 0.2 per cent at 18,090.55. Broader markets rose in tandem with the headline peers as BSE midcap and smallcap indices gained about 0.2 per cent each. Fear gauge India VIX upped slightly to 14.61-level.
ICICIDirect Research expects the index to resolve higher and gradually challenge the upper band of consolidation placed at 18,300 and it to hold the key support of 17,800 amid ongoing volatility.
"Key point to highlight is that, over the past six weeks, the Nifty has undergone shallow retracement as it retraced 50 per cent of preceding nine week’s rally indicating inherent strength that has helped index to form a higher base and paved the way for next leg of up move," it added.
On a sectoral front, the Nifty metal index jumped more than a per cent, leading the gainers. The Nifty IT and Pharma index was also trading with gains. However, all other sectors were trading in red, but the losses were capped. Auto, financials, FMCG and banks dropped marginally but the realty index shed about a per cent.
Hindalco and SBI Life were among the top gainers on the Nifty50 index, rising 2 per cent each. Tata Steel rose over a per cent over an upgrade from global brokerage. HCL Tech, Grasim, UPL and ONGC rose about a per cent each. On the downside, HDFC Life, Cipla, Adani Entertainment, M&M and Tata Motors were among the top losers.
India’s outperformance in 2022 has been temporarily reversed in January 2023, till date, mainly due to FII outflows to other markets, mainly China, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"India’s current underperformance is likely to be temporary since India has the best growth and earnings prospects among large economies. However, concerns of global slowdown this year and the possibility of FIIs again turning sellers at higher levels will cap the upside to the market in the near-term," he said.
In the broader markets, JTL Industries rose 13 per cent on the back of fundraising plans. KPI Green Energy, Allcargo Logistics, Shiva Cements, Tarsons Products and Rico Auto Industries rose 5-6 per cent each during the early trading hours.
Shree Paushak Chemicals and Fertilizers and Rama Steel Tubes tanked up to 6 per cent each. Delta Corp and ICICI Lombard plunged 4 per cent after disappointing Q3 earnings. Bank of India was also down 4 per cent despite a positive report by Credit Suisse.
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