Banking stocks drove the benchmark BSE Sensex and NSE Nifty 50 up 0.5 percent at the open on February 7 on the back of strong global cues. Since there are no immediate triggers on the horizon, analysts believe that stock-specific action and sector rotations will shape the market momentum from here on and drive benchmarks to fresh record highs in the next couple of sessions.
At 9:20am, the Sensex was up 0.4 percent at 72,510, while the Nifty 50 rose 0.4 percent to 22,031.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services expects benchmark indices to clock fresh record highs soon. “The fact that new leaders are emerging to take the market forward indicates that the uptrend is intact and new record highs are possible soon,” he said.
On the other hand, Mandar Bhojane, research analyst at Choice Broking said that the upward momentum in Nifty is expected to remain intact as long as it remains above the recent swing lows of 21,730, potentially reaching levels around 22,100-22,200 soon.
However, fear gauge India VIX, which measures volatility for the next 30 days could keep markets rangebound. India VIX gained marginally within the first hour of trade above 15 level.
Barring Nifty IT index, which is seeing profit-booking, all other sectors swimmed in the sea of green. Nifty PSU Bank emerged as the top sectoral performing as it gained over 2 percent.
Going forward, market expert Ajay Bagga believes that PSU banks would continue to re-rate after their decadal low underperformance. "PSU Banks are playing a catch-up now. Latest data indicated that these PSU Banks have collectively garned around Rs 98,000 crore in 2023 versus Rs 70,000 crore in 2022. Hence, we expect the PSB pack to perform well going ahead.," he told Moneycontrol.
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Global markets strong despite US Fed’s pushback to rate cuts
Overnight, US markets eked out slim gains as investors grappled with future monetary policy following latest comments from Fed Chief that the central bank was not ready to cut rates yet. However, strong corporate earnings season and fall in treasury yields provided some balm.
Dow Jones, S&P 500 indices gained up to 0.3 percent, while tech-heavy NASDAQ Composite was flat-to-positive.
Asia-Pacific markets followed Wall Street suit and traded mostly higher this morning. South Korea's Kospi lead Asia with 1.8 percent gains, while Kosdaq was up 1.2 percent. Australia's S&P 200 rose 0.6 percent and Hong Kong's Hang Seng jumped 1 percent.
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