Sensex jumps 284 points, Nifty above 18,350; Realty, PSU bank zoom

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Domestic benchmark equity indices opened with a positive bias on Thursday after a mixed Wall Street session, as investors weighed corporate earnings, elevated inflation and risks from China’s property sector. However, the upside could be capped due to the weekly expiry of derivatives contracts. In opening trades, Sensex rose 284 points or 0.47% to 61,544 while the Nifty 50 was quoting at 18,382 higher by 116 points or 0.64%.

“There are mixed cues for the market with some global tailwinds and domestic headwinds. Strength in the mother market US, declining dollar index and stability in European markets are positives. But these positives are likely to be overwhelmed by the domestic headwinds like high valuations which have become unsustainable and rising commodity inflation which will impact the margins of firms. Sustained selling by institutions – both DIIs and FIIs – indicate that smart money regards the market overheated and overvalued,” said VK Vijayakumar, Cheif Investment Strategist at Geojit Financial Services.

The dip in the broader market and cracks in leveraged momentum plays have pushed the VIX higher by 5%. Retail investors should temper their expectations from the market. Partial profit booking, particularly in overvalued segments, may be considered, Vijayakumar added.

Gainers & losers

Sectoral strand

Barring the Nifty IT (down 0.46%) index all other sectoral indices were trading with gains. Nifty Realty was the top gainer as it rallied 1.14%, followed by Nifty PSU Bank advancing 0.85% and Nifty Pharma index rose 0.82%.  Nifty Auto, Nifty Bank and Nifty FMCG indices were up in the range of 0.30-0.55%.

Broader markets

Unlike benchmark indices, broader markets were trading flat. BSE MidCap index was down 55 points or 0.22% to 25,858 while the BSE SmallCap index was quoting at 28,886 marginally up by 8 points.

The market breadth was positive as 1,577 shares advanced compared to 878 declining while 107 remained unchanged.

Earnings today

Asian Paints, JSW Steel, Biocon, Container Corporation of India, IDBI Bank, Indian Energy Exchange, IIFL Securities, Indian Hotels, IndiaMART InterMESH, Lemon Tree Hotels, LIC Housing Finance, Bank of Maharashtra, Mphasis and TVS Motor Company are among 49 companies set to report their September quarter numbers today.

Global markets

Overseas, Asian stocks are trading mixed on Thursday, as investors monitored shares of developer China Evergrande Group in Hong Kong. Evergrande shares dropped sharply on Thursday, returning to trade on Thursday after a halt that lasted more than two weeks.

Evergrande said on Wednesday it had scrapped a deal to sell a 50.1% stake in Evergrande Property Services Group Ltd to Hopson Development Holdings Ltd as the smaller rival had not met the “prerequisite to make a general offer”.

In the US, the S&P 500 and the Dow climbed on Wednesday with the Dow hitting an intraday record high as investors eyed better than expected third-quarter earnings from U.S. companies.