Dalal Street was trading firm in the green on Wednesday, August 13, after the equity benchmarks surged over half a percent following positive global cues and upbeat economic data. However, experts advised caution, suggesting the day's uptick might be a bull trap.
On August 12, the US July CPI eased to 2.7 percent year-on-year, below the expected 2.8 percent, boosting expectations of a rate cut at the upcoming FOMC meeting, which is a positive signal for markets. On the domestic front too, India's retail inflation eased to 1.6 percent, hitting eight-year lows, adding to the optimistic sentiment.
At close, the Sensex was up 304.32 points or 0.38 percent at 80,539.91, and the Nifty was up 131.95 points or 0.54 percent at 24,619.35. About 2099 shares advanced, 1806 shares declined, and 142 shares unchanged.
On the sectoral front, Nifty Pharma topping the gainers at 1.7 percent, followed by Nifty Metal up 1.3 percent and Nifty Auto up 1.1 percent. Nifty Media, Realty, and Infra also traded higher, while FMCG, PSU Bank, and Energy indices slipped marginally.
Broader markets outperformed the Nifty 50 in today’s trade, with the Nifty Midcap 100 rising 0.62 percent and the Nifty Smallcap 100 gaining 0.61 percent, compared to the Nifty 50’s 0.5 percent uptick.
Despite the positivity seen on Dalal Street today, experts suggested a cautious stance. "Given the current environment of uncertainty and heightened volatility, traders are advised to adopt a cautious “wait-and-watch” approach, especially with leveraged positions."
Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private said, "Booking partial profits during rallies and using tight trailing stop-losses remain prudent risk management strategies. Fresh long positions should be considered only if the Nifty sustains above the 24,750 level. Overall, the broader outlook stays cautiously bullish, with a focus on monitoring key breakout levels and global market developments."
"This is the right time for asset allocation. Investors with a long-term investment horizon of 3 years and above can accumulate fairly valued largecaps in banking, telecom, capital goods, aviation and select midcap IT. The risk-reward in these segments is favourable for investment," added VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
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Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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