Sensex, Nifty open flat with positive bias; banks, financials lead

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Indian benchmark equity indices edged higher in early deals on Tuesday tracking gains in index-heavyweights HDFC Bank, Ultratech Cement and Kotak Bank. Sensex gained 53 points or 0.10% at 52,933, while Nifty 50 was advanced to 15,860, up 26 points or 0.17%.

Gainers and losers

Bajaj Finance, HDFC Bank, UltraTech Cement, Maruti & Titan were among the top gainers on the Sensex advancing nearly 1% each. On the other hand, Tech Mahindra, Bharti Airtel, Nestle India, Reliance Industries & HUL were the laggards slipping over 0.5%.

Barring Nifty FMCG (down 0.05%) and Nifty Pharma (down 0.02%) all other sectoral indices were trading in the green. Nifty Realty was the top gainer up 0.61%, Nifty Auto, Nifty Bank, Nifty Metal indices were up about 0.25-0.55%. Nifty IT index was marginally up by 0.06%.

“Many global market experts are warning of bubbles in many asset classes, most prominently in equities. Equities, globally, are over-valued by all matrixes. But interestingly, most bears warning about the collapse of the bubble are fully invested. These “fully invested bears” reflect the present market dilemma. Most bears are fully invested because the usual triggers for a sharp correction – persistent inflation, hawkish Fed, signals of imminent recession – are absent. So, the bull juggernaut may continue to roll on; but investors have to exercise caution. Some rebalancing of portfolios in favour of fixed income may be initiated. Markets are likely to respond positively to many Q1 FY22 numbers coming out from this week onwards. Brent crude at $77 is a serious macro concern,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The broader market however outperformed benchmark indices as the BSE MidCap index was up about 0.28% at 22,648 while the BSE SmallCap index rose 0.40% at 25,868. The market breadth favored the bulls as 1,309 stocks advanced compared to 477 shares declining and 471 scrips remained unchanged.

Global markets

Overseas, Asian stocks are trading mixed on Tuesday as investors look ahead to the Australian central bank’s interest rate decision.

U.S. markets were shut on Monday in observance of Independence Day.

Meanwhile, OPEC+ ministers called off oil output talks on Monday after clashing last week when the United Arab Emirates rejected a proposed eight-month extension to output curbs, meaning no deal to boost production has been agreed.