Nifty tops 17,400, Sensex jumps 281 points; broader market rallies

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Domestic benchmark equity indices opened higher taking cues from Asian peers that were trading higher on hopes of better pandemic management and more spending by Japan’s new Prime Minister. In opening trades, Sensex touched a new peak of 58,411 advancing 281 points or 0.48%, while the Nifty 50 jumped 75 points or 0.44% to 17,399.

“Some negative economic news is likely to turn out to be positive for markets in the very short-term. The US jobs data – only 2.35 lakh jobs added in August against the expectation of above 7 lakhs – support the Fed’s claim that “there is much more ground to cover” before rates are revised upwards. So, even tapering expected by this year-end is likely to be a ‘taper without tantrum’. The dollar index hovering around 92.16 is likely to support fresh FII inflows. This, along with sustained DII investment and active retail buying can impart resilience to the market even at high valuations. Fresh highs are likely driven by the strong uptrend in RIL and renewed buying in banking stocks. The ideal strategy in this bull market is to remain invested with occasional partial profit bookings and moving some profits to fixed income,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Gainers & losers

Sectoral strand

All sectoral indices on the NSE opened higher. The Nifty Auto was the top gainer surging 0.81%. While Nifty Realty, Nifty Pharma, Nifty Metal, Nifty FMCG, Nifty Bank and Nifty IT indices rose up to 0.61%.

Broader markets

The broader markets outperformed the benchmark indices and scaled to a new peak. The BSE Midcap opened higher at 24,547 advanced 164 points or 0.68%, after it touch new high of 24,559. While the BSE Smallcap index rose 184 points or 0.68% to 27,489 and it scaled to new peak of 27,489 in early trades.

Market breadth was positive as 1,678 shares advanced compared to 730 declining whereas 131 remained unchanged.

Global markets

Overseas, Asian stocks are trading higher on Monday following U.S. jobs data released Friday that came in far short of expectations. Japanese shares climbed on hopes of better pandemic management and more spending by Prime Minister Yoshihide Suga’s successor.

In US, the Dow Jones Industrial Average retreated on Friday and the S&P 500 slipped from a record high after the August jobs report came in short of expectations, showing the impact of the delta-fueled Covid resurgence.

U.S. jobs data released Friday came in far short of expectations, with the economy adding just 235,000 positions in August. Meanwhile, the unemployment rate declined to 5.2% from 5.4% in July, in line with estimates.

In a press conference on Friday, President Joe Biden touted the average monthly job gains since he took office and lower weekly jobless claims, and called for more vaccinations and for Congress to pass infrastructure and budget bills.

U.S. markets are closed on Monday for the Labor Day holiday.