Sensex opens 117 points higher, Nifty above 16,300; auto, realty stocks lead

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Benchmark equity indices opened higher on Thursday tracking gains in global markets. Sensex rose 117 points or 0.21% to 54,643 at open, while the Nifty 50 index added 29 points or 0.18% at 16,311.

“Global equity markets have positive news from the US inflation data for July which has come at 0.5% month on month. This is slightly lower than expected and confirms the Fed thesis that inflation is transitory. The positive response of Dow and S&P to the inflation numbers and the decline in the Dollar index will strengthen the bulls. However, investors should exercise caution in this exuberant bull market since valuations are stretched and risks are rising. Healthy development in the market is the steady removal of froth in the mid-and small-cap segments which are down 3.5% and 6% respectively from their peaks. At the same time, the return of quality like HDFC twins, Kotak Bank, Bharti, and RIL bode well for the market health,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Gainers & losers

Sectoral strand

Among the sectoral indices, the Nifty Auto gained 0.39%, while Nifty Realty rose 0.33%. Nifty FMCG, Nifty Metal, Nifty Bank and Nifty IT indices were up between 0.15-0.30%. On the downside, the Nifty Pharma index lost 0.62%.

Broader markets

The broader markets continued to show strength after the BSE clarified that the new surveillance measure will be applicable only on securities worth Rs 10 or above and having a market capitalisation of less than Rs 1,000 crore. The exchange further added that the said framework is applicable to BSE exclusive securities in groups including X, XT, Z, ZP, ZY, Y.

The BSE MidCap index rose 0.30% to 22,777 and the BSE SmallCap index was trading at 26,063 higher by 0.83%.

Overall market breadth was positive as 1,627 shares advanced compared to 652 declined and 72 remained unchanged.

Earnings today

Tata Steel, Eicher Motors, Hero MotoCorp, Aurobindo Pharma, BPCL, Oil India, Ashok Leyland, Bharat Forge, Ansal Properties & Infrastructure, Apollo Micro Systems, Ashapura Minechem, Avanti Feeds, Clariant Chemicals (India), Dishman Carbogen Amcis, Dish TV India, Engineers India, Finolex Cables, Gujarat Pipavav Port, GR Infraprojects, HCC, HealthCare Global Enterprises, HUDCO, Ind-Swift Laboratories, IRCON International, IRCTC, JB Chemicals, KNR Constructions, Matrimony.com, Max India, Mazagon Dock Shipbuilders, Mishra Dhatu Nigam, Minda Corporation, Natco Pharma, NMDC, Page Industries, Power Finance Corporation, RailTel Corporation of India, RCF, Redington (India), RITES, Sadbhav Infrastructure Project, Schneider Electric Infrastructure, Skipper, Sundram Fasteners, Suryoday Small Finance Bank, Thyrocare Technologies, Trident, Ujjivan Financial Services, and Venus Remedies are set to announce their quarterly earnings today.

Global markets

Overseas, Asian stocks are mostly trading higher after U.S. shares climbed on signs of moderating inflation that reduced concerns about an imminent paring back of Federal Reserve stimulus.

Japanese wholesale prices rose in July at their fastest annual pace in 13 years. The corporate goods price index (CGPI), which measures the price companies charge each other for their goods and services, rose 5.6% in July from a year earlier, Bank of Japan data showed.

In the US, the Dow Jones Industrial Average and S&P 500 closed at record levels on Wednesday, as data indicated U.S. inflation growth may have peaked, while sectors tied to economic growth advanced on the heels of the passage of a large infrastructure bill.

U.S. consumer prices increases slowed in July. The consumer price index increased 0.5% last month after climbing 0.9% in June, the Labor Department said on Wednesday. In the 12 months through July, the CPI advanced 5.4%. The drop in the month-to-month inflation rate was the largest in 15 months.

Investors will continue to monitor the Covid situation in the region after the World Health Organization warned global cases could pass 300 million by early next year if the pandemic continues in its current direction. The projection came just a week after the WHO reported 200 million Covid cases worldwide and six months after the globe topped 100 million cases.

In Australia, Melbourne extended its lockdown by another week as it struggles to contain the highly infectious delta variant.