FIRST TRADE: Indices open sharply higher mirroring gains in Asian markets; Nifty above 24,325 levels

Stock market news August 16, 2024: Indian equities mirroring positive Asian markets started trade on a positive note as retail data in the US boosted sentiment and quelled recessionary fears in the world's most developed economy. At around 9:16 am, the BSE Sensex was up 0.8 per cent or 621.79 at 79,727.67, while the NSE Nifty was up 0.76 per cent or 182.7 points at 24,326.45 levels.

Meanwhile, Bank Nifty- the high beta index was also up a significant 1 per cent at 50,199.6, while the broader markets too traded with decent gains of up to 1 per cent.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services stated, "Globally stock markets have turned around smartly from the August 5th sell-off triggered by US recession fears and the unwinding of the yen carry trade".

The latest data on US inflation and unemployment relief do not indicate that the US economy is tipping into recession.

On the other hand, the 2.9% annual inflation number and slightly softening labour markets set the stage for a Fed rate cut in September, which the market is pencilling in now. The sharp dip in CBOE VIX to around 15% indicates that the fears were overdone and stability is the near-term trend, added Vijaykumar. 

Sectorally, buying sentiment topped with the IT and auto pack showing the most strength. Nifty IT has gained ground after the positive data from the US offers hope on revival in discretionary spending in the sector.

In Wednesday’s session, FIIs were net sellers by Rs 2,595 crore, while DIIs bought Rs 2,236 crore.

In India we have the paradox of exuberant retail investors and cautious institutional investors. The former is not much concerned about the elevated valuations of the market while the latter are increasing their cash component on valuation concerns. Investors should give priority to valuations in their fresh investment. The broader market doesn’t have valuation comfort, noted Vijaykumar.

Ola Electric which made a weak debut has been given its first 'buy' buy HSBC and as against the IPO price of Rs 76, the stock has topped levels of Rs 128 per share in today' s session. marking over 68 per cent gains in just 5 days.

Meanwhile, Asian markets tracking overnight gains in the US after buoyant economic data traded with decent gains, with Japan's Nikkei leading the Asian markets.