Benchmark stock market indices opened higher on Friday, despite the government raising petrol and diesel prices amid an energy crisis arising due to the West Asia war.
The S&P BSE was up 292.55 points to 75,691.27, while the NSE Nifty50 gained 83.70 points to 23,773.30 as of 9:34 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that the 789 point rise in Sensex yesterday was mainly triggered by short covering.
“FIIs were positioned heavily on the short side. There are rumours of measures to shore up the rupee and attract capital into the economy. We will have to wait for clarity on this,” he added.
After the opening bell, Infosys Ltd led the Sensex gainers, rising 2.87%. It was followed by Tech Mahindra Ltd, which gained 2.77%. Tata Consultancy Services Ltd moved up 2.14%, while HCL Technologies Ltd added 1.87%. Kotak Mahindra Bank Ltd also opened higher, rising 1.57%.
Reliance Industries Ltd saw the sharpest fall, dropping 1.34%. Eternal Ltd declined 1.30%, State Bank of India Ltd was down 1.10%, Trent Ltd slipped 0.78%, and Bharat Electronics Ltd fell 0.70% in early trade.
The market did not see any negative effect in early trade of the petrol, diesel prices rising by Rs 3 per litre.
“The decision to increase the price of petrol and diesel by Rs 3 a litre and CNG by Rs 2 a kg indicate that the government is playing it safe through small increases, perhaps stage by stage, without triggering a sharp spike in cost-push inflation. This is a welcome step,” said Vijaykumar.
“There are some trends in the market which investors have to watch. The market is responding hugely positively to good Q4 results with double-digit price rises in some cases, and punishing poor results with double digit price crashes in some cases. This reflects the gap in market expectations and actual results,” he added.
“Another important trend is the continuing weakness in IT stocks and sustaining strength in pharmaceuticals stocks. This reflects the market perception of the prospects of these sectors in the present challenging environment,” concluded Vijaykumar.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)