Sensex and Nifty 50 opened slightly lower on September 24, but soon hit record highs driven by gains in metal and energy stocks. Nifty has been reaching new highs since the US Fed's 50 bps rate cut on September 18, with global market optimism also fueling the surge.
While Nifty hit a fresh high of 25,971, Sensex surpassed 85,000 for the first time and hit a milestone of 85,023. At 9.50 AM, the Sensex was up 91 points or 0.1 percent at 85,020, and the Nifty was up 28 points at 25,967. About 1,823 shares advanced, 1,259 shares declined, and 122 shares remained unchanged.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, highlighted two key trends. He pointed to escalating geopolitical tensions in the Middle East, with Israeli strikes on Lebanon raising concerns. This has pushed crude oil prices higher. Gold and the volatility index are moving up as well reflecting anxiety. Despite these challenges, the market remains strong, and the overall sentiment is still bullish, according to Vijayakumar.
The renewed interest from Foreign Institutional Investors (FIIs) in September is expected to boost recovery in leading banking stocks. Nifty Bank gained for the ninth session today.
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Aishvarya Dadheech Founder & CIO of Fident Asset Management told Moneycontrol that if FII's continue to buy, the markets could see much higher levels by Diwali.
Nifty Metal emerged as the top gainer amongst sectoral indices after China announced new stimulus measures to boost its economy. The index rose nearly 2 percent led by gains in Tata Steel, Hindalco, and JSW Steel.
Meanwhile, Nifty IT fell over half a percent dragged down by Infosys, TCS, and HCLTech. According to a recent report by Jefferies, HCL Tech, Tech Mahindra, and LTIMindtree see no significant change in demand. The brokerage advised selectivity in IT stocks, citing cautious management outlook, sharp price movements, rich valuations, and limited margin expansion in FY25 due to slow revenue growth.
Dadheech told Moneycontrol that normally, the second quarter is the strongest for the IT sector, but expectations this time aren't strong. "Even the likes of Infosys and TCS are expected to grow between 1.5 percent and 2.5 percent, where they usually grow 5 percent to 6 percent. Some companies that consistently show strong growth are also expected to see muted results. This is why the market expects Q2 for Nifty IT to be muted, leading to weakness in IT stocks."
Also Read | Stay selective on IT stocks amid soft management commentary, rich valuations: Jefferies
On the Nifty 50, Power Grid, Nestle, Hindalco, JSW Steel, and Tata Steel gained 1-2 percent, while SBI Life, Shriram Finance, HDFC Life, HUL, and Bajaj Finance each declined over 1 percent, leading the losses.
Overnight in the US, all three benchmarks closed higher with the S&P 500 and Dow Jones Industrial Average touching new closing highs after Fed officials including Raphael Bostic, Neel Kashkari, and Austan Goolsbee supported the central bank's 50 bp rate cut and voiced support for more cuts in the rest of the year.
Asia-Pacific markets climbed in early trade today, led by Chinese stocks as Beijing announced a slew of policy easing measures in a rare briefing from central bank governor Pan Gongsheng.
"After the inaugural Fed rate cut, focus now turns to US PCE inflation to trickle this Friday (," said Prashanth Tapse, Senior VP (Research) at Mehta Equities. While Nifty is likely to be in a trading range of 25000-26500 zone, the 26500 mark is now the major resistance zone for the index on a closing basis.
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