Nifty, Sensex open marginally higher as pharma, healthcare stocks rise; UltraTech Cement in focus

Multiple market experts suggest that valuation in the pharma sector seems attractive after a health correction. Bloomberg

Benchmark indices Nifty and Sensex were off to a muted start after opening in the positive, albeit slightly, extending their five-day gaining streak on August 27. This comes just a day after the two gained one percent each following the US Fed's indication of a rate cut next month.

At about 9:20 am,  the Sensex was up 75.78 points or 0.09 percent at 81,773.89, and the Nifty was up 18.10 points or 0.07 percent at 25,028.70. About 1663 shares advanced, 890 shares declined, and 124 shares unchanged.

"The overall breadth remains positive even if we see a flat-to-negative start and as the day progresses, stock specific buying could carry the markets in the green", Ruchit Jain, research analyst at 5paisa told Moneycontrol. He added that despite a gradual upmove in the headline indices, buying stock specific buying opportunities have largely contributed to the sentiment.

Cement and construction major UltraTech Cement was buzzing in trade after it successfully raised $500 million through a sustainability-linked loan, aligning its funding strategy with its sustainability and ESG goals. The financing, supported by six banks, marks UltraTech's second sustainability-linked initiative following its pioneering bond issuance in 2021, the company said in an exchange filing on August 26. Shares of the company were edged higher by a percent.

The broader market, mainly mid-small cap indices, outperformed the Nifty and Sensex after rising 0.2 and 0.3 percent, respectively. Jain added that this space hasn't reached the 'euphoria' stage yet and strong retail coupled with mutual fund inflows will keep the buoyancy intact. To be sure, the mid-small cap indices have outpace the Nifty's year-to-date gains comfortably. "This week, the market will focus on India & US GDP data, derivatives monthly expiry, and other global cues," Siddhartha Khemka, Head of Retail Research at Motilal Oswal, said.

Among sectors, Nifty Pharma was the top gainer, rising almost a percent after gains in Divi's Labs and Dr Reddy's kept the index higher. Multiple market experts suggest that valuation in the pharma sector seems attractive after a health correction. The healthcare index followed next, up 0.5 percent. Nifty IT also saw buying interest after it rose 0.4 percent.

"After a flat opening, Nifty can find support at 24,950 followed by 24,850 and 24,800. On the higher side, 25,050 can be immediate resistance, followed by 25,150 and 25,200," Hardik Matalia, Derivative Analyst at Choice Broking, said. "The charts of Bank Nifty indicate that it may get support at 51,000, followed by 50,800 and 50,700. If the index advances further, 51,300 would be the initial key resistance, followed by 51,500 and 51,600," he added.