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 largecaps from the overvalued mid- and smallcaps, said an analyst.
“The outperformance of largecaps, 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,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are the bluechips doing?
After opening in the green, benchmark indices rose further higher. At 9.21 am, BSE flagship Sensex was up 238 points or 0.43 per cent to 56,031. NSE benchmark Nifty climbed 64 points or 0.38 per cent to 16,678.
In the 50-share pack Nifty, HDFC Bank was the biggest gainer, up 2.19 per cent. Eicher Motors,
, Bajaj Finserv, HDFC, PowerGrid and Insurance were among other gainers.
Wipro was the top loser in the pack, down 0.71 per cent.
, JSW Steel, Indian Oil, Bajaj Auto, , , Bharat Petroleum and Kotak Mahindra Bank were other losers in the pack.
FACTORS DRIVING MARKETS
Good news
HDFC Bank: The RBI’s decision to lift the ban on HDFC Bank from issuing cards is a big reason markets are up today. Rise in HDFC twins contributed nearly all of the gains in Sensex in early trade.
Bad news:
Dollar surges: The dollar hit a nine-month high against the euro on Wednesday and held near recent peaks on other majors. The dollar is often used as a safe store of value during political and financial uncertainties.
Retail sales lower: US retail sales fell more than expected in July as shortages depressed motor vehicle purchases and the boost to spending from the economy’s reopening and stimulus checks faded, suggesting a slowdown in growth early in the third quarter.
Broader markets
Broader market indices were trading higher, but underperforming their headline peers in morning trade. Nifty Smallcap was up 0.29 per cent, while Nifty Midcap advanced 0.37 per cent. Broadest index on NSE, Nifty500 was up 0.44 per cent.
UTI AMC, Kaveri Seeds Company, Alok Industries, Adani Total Gas, Hindustan Aeronautics and V-Guard were gainers from the space while Tata Elxsi, Prestige Estate projects, Voda Idea, VIP Industries, Future Retail and Granules India were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.19 per cent, having fallen for the past five sessions, and traded just above year-to-date lows touched in July. Chinese bluechips rose 0.21 per cent and Japan’s Nikkei rose 0.35 per cent. Taiwan stocks fell 1.09 per cent.
US stock futures, the S&P 500 e-minis, were little changed in Asian hours, down 0.01 per cent. This is after overnight, Wall Street fell as retail sales came in below expectations and valuations became increasingly stretched. The S&P 500 lost 0.71 per cent after posting a new record high on Monday.
