FIRST TRADE: Equity indices open higher as Fed's dovish comments boost D-Street sentiment; Nifty tops 24,900 levels

Indian equity benchmark opened in the green in Monday's session (August 26) as sentiment was boosted after the Fed's comments at the annual Jackson Hole event. At the open, Nifty was trading higher by around 0.23 per cent or 57.2 points at 24,880.35, while Sensex was up 0.29 per cent at 81,324.64. Meanwhile, Bank Nifty was also resilient.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, "The Fed chief Powell’s clear message of the beginning of the rate cutting cycle will impart further resilience to the ongoing global rally in stock markets. Deviating from his usual cautious messaging, this time Powell unambiguously stated that “the time has come for policy to adjust” and that “the direction of travel is clear.” This will act as sort of a “Powell put” similar to the famous “Greenspan put” that supported US equity markets during the Greenspan era.
 
From the Indian market perspective, this is significant since it will strengthen the minority view espoused by the two independent members of the MPC in favour of rate cuts in the last monetary policy meeting. Since core inflation in India is only 3 per cent and economic growth is turning slightly sluggish, the MPC is likely to cut rates by 25 bp in the next meeting, The consequent rise in bond prices will be positive for banks, which present a good buying opportunity, since valuations are fair.
 
On the flip side, worsening of the Israel-Hezbollah tensions may have a negative impact, if the situation worsens further."

Meanwhile, FIIs and DIIs have turned net buyers, 

Nifty is likely to trade within a 24,000-25,500 range, with 26,000 as the key resistance. Additionally, WTI crude prices are rising amid Middle East tensions, noted Prashant Tapse, Senior VP (Research), Mehta Equities.

Stocks in focus 

Trent

on the inclusion in the index will see traction. The Tata Group stock has already has already rallied significantly. Anil Singhvi- Managing Editor has given his buy calls on Trent Futures for a target of Rs 7,100 and a stop loss of Rs 6,850.

Bharat Electronics

Similarly on inclusion in the Nifty index, the PSU defence stock will also show run-up. 

The rejig will be applicable from the close of September 30.