FIRST TRADE: Sensex opens above 80,650, Nifty up 87 pts; ONGC top gainer

Indian equities started Monday's session (August 19) on a positive note mirroring Asian markets as rate cut expectations by the US Fed were bolstered amid cooling inflation print.  At the open, Sensex opened 0.3 per cent higher at 80,667.07, while the Nifty index traded above 0.36 per cent or 87.4 points higher at 24,628.55 levels.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "The 397 point rally in the Nifty last Friday reinforces the resilience of the ongoing bull market and the consistent success of the buy on dips strategy. The fact that this ability of the market to bounce back is happening when valuations are elevated is significant. It is also important to note that all corrections in this rally have been brief unlike in the past when corrections have been prolonged. The complete dominance of the DII and retail investors over the market is the single major factor driving this bull run."

The sharp dip in the dollar index to 102.4 might nudge the FIIs to invest in India but the lofty valuations have been forcing them to sell, he added. At the last count, the dollar index (DXY) was trading at 102.34, down 0.12 per cent.

Oil companies are in focus today after the Centre on Friday slashed the windfall gains tax on crude oil to Rs 2,100 per tonne from Rs 4,600 per tonne. The new rates came into effect from August 17. At the last count, BPCL, ONGC were among the top Nifty gainers. A decrease in windfall tax works well for upstream oil companies such as Oil and Natural Gas Corp and Oil India, boosting their chances of high profitability.

Gold jewellery and gold loan companies will also gain traction as gold prices in the international markets have swiftly crossed $2,500 per ounce levels.

State-run bankers SBI and PNB have been given a breather as both the banks have asked the Karnataka Government for 15 days to resolving the grievance. Both the stocks traded with gains as the Nifty PSU Bank index also was up over 1 per cent.

Prashanth Tapse, Senior VP (Research), Mehta Equities mentioned that all eyes will now be on the Jackson Hole Economic Symposium, where the Fed Chair Powell will deliver a highly anticipated speech on Friday, August 23.

We suspect Powell is likely to set the stage for the first rate cut in years. Hopefully, this September unemployment report gets the Fed to cut interest rates by 50 basis points. Among the positive catalysts, the fear of slowdown and fear of inflation in the US is off the front pages. Technically, Nifty has support at 24101 with aggressive targets at 24900-25100 zone, he added.