Stock markets opened higher on Wednesday, with FMCG and heavyweight stocks supporting the rally even as fresh hostilities between the United States and Iran kept investors cautious.
The S&P BSE rose 337.02 points, or 0.46%, to 74,255.78 in early trade, while the NSE Nifty50 gained 80.35 points, or 0.35%, to trade at 23,322.45 as of 9:27 am.
The positive opening came despite renewed tensions in West Asia after . However, softer crude oil prices helped calm investor concerns, allowing domestic equities to trade higher.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the market appears to be treating the latest flare-up in West Asia as a temporary event.
“The market is likely to largely ignore the escalation of the conflict in West Asia as a one-off. The softness in crude prices indicates that. Despite the escalation, Brent crude continues to trade below $93 level,” he said.
FMCG stocks were among the biggest contributors to the market gains.
Hindustan Unilever emerged as the top Sensex gainer, rising 2.11%. Reliance Industries gained 1.33%, while Asian Paints climbed 0.98%.
TCS rose 0.76%, Kotak Mahindra Bank gained 0.76%, and Trent advanced 0.74%. ICICI Bank, State Bank of India and Infosys also traded in the green.
Among the laggards, Tata Steel was the biggest loser, declining 0.64%. Eternal slipped 0.55%, Bajaj Finserv lost 0.45%, Maruti Suzuki fell 0.44%, and Adani Ports declined 0.37%.
The broader market performance was mixed.
The Nifty Midcap 100 declined 0.35%, while the Nifty Smallcap 100 slipped 0.30%. However, the Nifty 100 and Nifty 500 traded marginally higher.
India VIX, the market volatility gauge, rose nearly 1% to 15.73, indicating continued caution among investors.
Among sectoral indices, Nifty FMCG gained 1.29%, emerging as the best-performing sector. Nifty IT rose 0.29%, Nifty Financial Services advanced 0.18%, and Nifty Private Bank gained 0.33%.
On the other hand, Nifty Metal was the biggest laggard, falling 1.51%. Nifty Auto declined 0.32%, while Nifty Realty slipped 0.17%.
Vijayakumar said another key global trend is the weakness emerging in the artificial intelligence-driven rally, especially in markets like South Korea and Taiwan.
According to him, foreign investors continue to remain cautious about Indian equities despite the correction in the market.
“Nifty at around 20 times earnings is fairly valued, but not attractively valued. Nifty midcap index at 29 times earnings and Nifty smallcap index at 33 times earnings are expensive,” he said.
He added that the gap between valuations of large-cap and broader market stocks may continue until foreign portfolio investors turn buyers in India.
Investors will continue to monitor developments in the US- conflict, crude oil prices and foreign investment flows.
Any sustained rise in oil prices could hurt sentiment due to its impact on inflation and the economy. At the same time, a recovery in foreign investor buying could provide support to Indian equities.
(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.)