Benchmark indices Nifty and Sensex extended their morning gains on November 29, buoyed by a strong rally in auto, pharma, energy, and infra stocks, just a day after logging their sharpest single-day decline in nearly two months.
Experts suggest that markets are adjusting to the likelihood of a slower pace of rate cuts, driven by robust US economic growth and lingering inflationary concerns. The Federal Reserve's preferred inflation measure, the Core PCE Price Index, rose 2.8 percent year-on-year in October, tempering expectations for near-term policy easing.
At about 10:50 am, the Sensex was up 748.25 points or 0.95 percent at 79,791.99, and the Nifty was up 212.00 points or 0.89 percent at 24,126.20. About 1,851 shares advanced, 1,359 shares declined, and 134 shares unchanged.
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"Foreign institutional buying had been supporting the markets over the past few sessions, but yesterday’s sell-off has reignited fears and triggered a short-term bearish momentum," said Ruchit Jain, Vice President of Technical Research at Motilal Oswal. "Given the lack of positive triggers in the market, we don't see aggressive buying taking place in the last month of the year," he added.
Notably, FIIs offloaded a hefty Rs 11,756 crore in the cash market yesterday, pushing the total outflows for November to nearly Rs 42,000 crore. This sharp sell-off comes after a brief two-day buying spree, during which foreign investors had net purchases of Rs 1,162 crore.
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Shares of Adani Green Energy, Adani Energy Solutions, and Adani Total Gas surged up to 10 percent in early trade on November 29, driven by their inclusion in the NSE's futures and options (F&O) segment from today. Adani Green led the gains, hitting its 10 percent upper circuit for the third consecutive session, while Adani Energy Solutions rose 9 percent and Adani Total Gas gained nearly 6 percent.
Reliance Industries was buzzing in trade, rising almost 2 percent, after Reliance Finance and Investments USA LLC, a step-down wholly owned subsidiary of the company, entered into a stock purchase agreement with Wavetech Helium, Inc., subscribing to a 21 percent stake in Wavetech, a helium gas exploration and production company. Following the development, Morgan Stanley issued an 'overweight' call on the stock.
Food aggregator Zomato traded lower after closing its Qualified Institutional Placement (QIP) issue, raising Rs 8,500 crore through the allocation of 33.64 crore equity shares for Rs 252.62 per share, which is at a 5 percent discount to the floor price of Rs 265.91 per share.
CreditAccess Grameen shares tanked as low as 11 percent after Goldman Sachs downloaded this tock to 'sell'. The brokerage expects a further build-up of stress due to over-leveraging in the industry and in the company's portfolio. It added that the accelerating decline in asset quality seen in the quarter gone by was a negative surprise. The asset quality will likely continue to decline, with the new guardrails put in place this week.
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In today's session, Nifty Pharma, Energy, Infra, IT, and Auto rose 0.7- 1.4 percent in the opening trade. Gains in Sun Pharma, Dr Reddy's, and Divis Labs lifted the Pharma index. Nifty Bank edged higher by 0.3 percent led by gains in HDFC Bank, ICICI Bank, and SBI.
All sectors traded in the positive. Nifty Realty pared all morning losses to trade flat. The index has gained 30 percent since the start of the year, sharply outpacing Nifty's 11 percent rise over the same duration.
The broader market, comprising the mid-small cap index, outperformed the headline indices with gains of 0.2 percent, each. The two have outperformed the frontline indices posting gains of 21 percent since the start of the year. The NSE Nifty has gained just over 11 percent over the same period. Traders believe that the space has seen a decent correction and markets could see buying interest and a possible outperformance in the coming weeks.
"Investors remain cautious ahead of key data releases tomorrow, including India’s Q2 GDP numbers, China’s manufacturing PMI, and Eurozone CPI. Optimism could return if geopolitical concerns ease, though consolidation within a broader range is likely to continue," Siddhartha Khemka, Head of Research and Wealth Management, said.
After failing to sustain above the 24,000 mark, the Nifty index remains under cautious pressure, with every uptick facing renewed selling interest. The index is now edging toward a critical support zone between 23,800 and 23,900, a level fortified by significant put-writing activity and historically acting as a strong cushion, SAMCO Securities, said. A decisive breakout above 24,100 could spark a short-covering rally, potentially driving the index toward 24,500. Conversely, a breakdown below 23,800 could escalate selling pressure, dragging the index further down to 23,500.
Cipla, Sun Pharma, M&M, Bharti Airtel and Adani Ports were the top gainers on the Nifty. Power Grid, Shriram Finance, SBI Life Insurance, Coal India, and Hero MotoCorp were the key losers.
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