Indian markets opened with gains on Friday following a rally in global stock markets. The Nifty 50 and Sensex both gained at the opening, with the Nifty 50 index surging 0.79 per cent and the BSE Sensex gaining 0.82 per cent. Markets globally have turned around from the August 5 sell-off triggered by US recession fears and unwinding of Yen carry trades. Recent data on US inflation and unemployment show no signs of an economy tipping into recession.
Global cues are supportive for the Indian markets, with three major risks from earlier in the week watering down considerably. Ajay Bagga, a Banking and Market Expert, noted the avoidance of an Iran attack on Israel, deflationary trends in US CPI and PPI numbers, and lower unemployment benefit claims increasing the chances of a soft landing in the US economy. However, continued FPI selling in India has taken out nearly $2.8 billion from the cash equities segment this month, leading to a consolidation phase in the markets.
During the opening session, broad market indices like Nifty Midcap 50, Nifty Small Cap 100, and Nifty Micro Cap 250 surged more than 1 per cent. Sectoral indices such as Nifty Auto, Nifty Media, Nifty IT, and Nifty Bank also saw gains of more than 1 per cent. In the Nifty 50 stocks list, 46 stocks advanced while 4 stocks declined. Analysts suggest that real strength may emerge if indices manage to close above certain levels, pulling the market up further.
Head Equity Research at Kotak Securities, Shrikant Chauhan, advised reducing weak long positions until the market trades above certain levels. While the Bank-Nifty is sustaining above the 50-day SMA level, it is struggling to surpass a certain level. As long as it doesn’t cross this level, it is expected to remain range-bound. In Asian markets, Japan’s Nikkei 225 index surged around 3 per cent, with Hong Kong’s Hang Seng, Taiwan’s Taiwan Weighted, and South Korea’s KOSPI also joining the rally.
In the US markets, the S&P 500 surged by 1.61 per cent while the Nasdaq rallied with a gain of 2.34 per cent. Earlier in the week, domestic indices ended a volatile session on a positive note. The Sensex rose by 0.19 per cent, while the Nifty 50 edged up by 0.02 per cent. The Indian stock market was closed on Thursday for Independence Day 2024. Overall, the global and Indian markets are seeing gains and positive trends in various sectors, with analysts advising caution and reducing weak positions.
