Stock Market: Sensex rises 125 pts, Nifty above 26,000; what’s next?

Domestic equity benchmarks, the Sensex and Nifty, opened higher on Tuesday, supported by steady foreign inflows, optimism around a potential US-China trade deal, and expectations of an interest rate cut by the US Federal Reserve, even as global cues remained mixed.

At 9:17 am, the BSE Sensex was trading 68.07 points, or 0.08 per cent higher at 84,846.91, after rising as much as 125 points in early trade. The NSE Nifty50 was up 35.95 points, or 0.14 per cent, to 26,002, after hitting a day’s high of 26,005.85.

Among Sensex stocks, Tata Steel led gainers, gaining 0.96 per cent to Rs 178.30.  SBI shares rose 0.84 per cent. Other gainers included Bharti Airtel (up 0.74 per cent), Titan (up 0.57 per cent) and L&T (up 0.44 per cent).

Wall Street ended higher overnight, with all three major US indices closing in the green. The Dow Jones Industrial Average advanced 0.71 per cent to 47,544.59, while the S&P 500 added 1.23 per cent to 6,875.16. The Nasdaq Composite rose 1.86 per cent to finish at 23,637.46.

Asian markets were largely in red in Tuesday’s trade. At last check, Japan’s Nikkei 225 was down 0.18 per cent to 50,419.96, while South Korea’s KOSPI dropped 0.89 per cent to 4,003.27. Hong Kong’s Hang Seng Index edged 0.01 per cent lower to 26,429.99.

On Thursday, the Sensex climbed 566.96 points, or 0.67 per cent, to settle at 84,778.84, while the Nifty50 advanced 170.90 points, or 0.66 per cent, to close at 25,966.05.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the recent news flow suggests that the positive momentum in the market is likely to continue. 

“There are indications of a possible agreement between the US and China on tariffs, and if there is a breakthrough in the Trump-Xi meeting on Thursday, that will give another leg up to the markets globally, where the leading indexes, like the S&P 500, Nikkei and Kospi, are at record highs. A near-term positive for the market is the expectation that the Fed would cut rates in the FOMC meeting on Wednesday since US CPI inflation (3 per cent YoY) is not as high as feared,” Vijayakumar said.

“There is fundamental support for the Indian market from the leading indicators relating to GDP growth and corporate earnings. The only concern is the relatively high valuations in India which might prompt the FIIs to again turn sellers if the market makes a smart rally,” Vijayakumar added.