Nifty opens above 25,400, Sensex extends bullish momentum as banking stocks lead early gains

Nifty, Sensex see firm open.

Dalal Street extended its bullish momentum to the second session on October 16, as benchmark indices Nifty 50 and Sensex kicked off the session with gains. Investors were optimistic around further rate cuts from the U.S. Federal Reserve, following dovish commentary from Chair Jerome Powell.

At 09:19 am, the Sensex was up 322.25 points or 0.39 percent at 82,927.68, and the Nifty was up 85.85 points or 0.34 percent at 25,409.40. About 1736 shares advanced, 782 shares declined, and 132 shares unchanged.

At the opening bell, sectoral indices showed a mixed trend. Gains were led by Nifty Private Bank and Nifty PSU Bank, which rose 0.86 percent and 0.60 percent, respectively. Realty, Auto, and Consumer Durables also opened higher, while IT and Metal saw mild declines.

Most other sectors, including FMCG, Healthcare, and Financial Services, were trading in the green, indicating a broadly positive market sentiment in early trade.

Analysts are also optimistic that the India-U.S. trade deal may come to fruition soon. The latest comments from the U.S. administration indicate reduction in the India-U.S. trade tensions and points to the possibility of a U.S.-India trade deal in the next few weeks.

"China’s tough actions regarding the rare earth magnets have hit the US hard and, therefore, the US is keen on striking a deal with India with both countries making some concessions," noted VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

He added that India’s exports and jobs in labour intensive areas like textiles, gems and jewellery and leather products have been hit hard. In this context, a U.S.-India trade deal will be a big boost to the markets.

In the current environment of heightened volatility and mixed market cues, experts advise traders to maintain a cautious buy-on-dips approach, particularly when using leverage. Booking partial profits during rallies and maintaining tight trailing stop-losses is recommended to manage risk effectively.

"Fresh long positions should be considered only if the Nifty sustains above the 25,500 mark. While the broader market undertone remains cautiously bullish, close monitoring of key technical levels and global developments will be crucial in the sessions ahead," said Amruta Shinde, Technical & Derivative analyst, Choice Broking.

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