The trigger for the correction has been sustained FII selling during the last nine trading days following the downgrade of India by a few leading foreign brokerages like UBS and Nomura who are concerned about excessive valuations, said an analyst.
“An important factor that might influence the market is the new IPOs opening this week. Heavy oversubscriptions in attractive IPOs are draining money from the secondary market. So, FII selling and IPOs have emerged as headwinds for the market in the short term. Investors may wait for the market to consolidate before taking fresh investment decisions,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices continued to gain momentum. At 9.50 am, BSE flagship Sensex was up 425 points or 0.72 per cent to 59,732. NSE benchmark Nifty advanced 120 points or 0.68 per cent to 17,791.
“We believe investors should trade carefully in the coming 2-3 days as international markets may have some uncertainty or challenges before the coming FOMC meeting. On the technical front, Nifty 50 is currently trading at a very good support zone near 17,500-17,700 and we believe markets may show some good recovery from these levels. The 18,000 level is an immediate hurdle on the upside for Nifty 50, respectively,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Tata Steel was the biggest gainer, up 3.29 per cent. HCL Tech, IndusInd Bank, Hindalco Industries, Tech Mahindra, Bharti Airtel and Infosys were among other gainers.
UPL was the top loser in the pack, down 4.15 per cent. Bajaj Finserv, Nestle India, M&M, Tata Motors, HUL, IndianOil, Bajaj Finance, Sun Pharma, ITC and Bajaj Auto were among those that traded in the red.
Factors driving markets
Inflation transitory?: Data released on Friday showed the jury was still out on the Fed’s claim that current price spikes are transitory and should moderate with time, with the personal consumption expenditures price index advancing last month to continue a run of inflation at levels not seen in 30 years.
US dollar: The greenback is also weighing on stocks. It steadied close to its highest level since October 13.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.98 per cent while Nifty Midcap declined 0.89 per cent. The broadest index on NSE, Nifty 500 was up 0.78 per cent.
Intellect Design, GNFC, Trident, Dhani Services, Godrej Properties and Voda Idea were gainers from the space while Manappuram Finance, Laurus Labs, IRCTC, Amber Enterprises, Rossari Biotech and Kalpataru Power were under selling pressure.
Sensex climbs 450 points, Nifty50 tops 17,800; SAIL surges 9%, IRCTC 3%
OPENING BELL: Sensex climbs 450 points, Nifty50 tops 17,800; SAIL surges 9%, IRCTC 3%
