Mumbai, Oct 5: Indian equity markets opened higher on Monday, extending optimism from global markets as softer-than-expected US jobs data eased concerns over an immediate tightening of monetary policy by the US Federal Reserve.
The Nifty 50 opened at 22,532.40, gaining more than 100 points, or 0.49 per cent, while the Sensex rose over 400 points to open at 72,340.95, up around 0.6 per cent.
The early buying was broad-based, with most sectoral indices trading in positive territory. PSU banks, media and metal stocks emerged as the key gainers, with their respective indices rising by up to 1 per cent.
The Nifty Realty index gained 0.93 per cent, while chemicals, FMCG and oil and gas stocks advanced between 0.8 per cent and 0.85 per cent. Private banks and consumer durable stocks also traded firmly higher.
IT, auto and pharma stocks remained largely flat in early deals. Healthcare stocks were among the few laggards, although the decline was marginal, with the Nifty 500 Healthcare and Nifty Healthcare indices falling 0.07 per cent and 0.12 per cent, respectively.
Global cues improve investor sentiment
The domestic market tracked gains across Asian equities after weaker-than-expected US employment data reduced expectations of an immediate rate hike by the US Federal Reserve. The development offered some relief to investors amid concerns over global interest rates and bond yields.
Market analysts said Indian equities could witness a short-term rebound following eight consecutive weeks of decline. However, they cautioned that elevated crude oil prices, high US bond yields and persistent foreign investor selling could continue to create volatility.
At the same time, relatively attractive valuations, particularly in large-cap stocks, could provide some support to the market and improve investor interest if global conditions remain stable.
Auto sales signal domestic resilience
Positive September automobile sales have also strengthened expectations that domestic consumption remains resilient. Robust vehicle demand is being viewed as a sign that parts of the Indian economy continue to maintain momentum despite global uncertainties.
Banking stocks are expected to remain in focus ahead of the Reserve Bank of India’s monetary policy decision on Wednesday. The central bank is widely expected to raise its policy rate by 25 basis points, with much of the move already reflected in market expectations.
Analysts said higher floating lending rates could support bank margins, provided credit demand remains healthy.
FII selling remains a concern
Foreign fund flows continue to remain a key factor for the market. Foreign Institutional Investors (FIIs) remained net sellers in the previous session, selling equities worth Rs 9,484 crore.
Domestic Institutional Investors (DIIs), however, continued to offer support, making net purchases of Rs 10,041 crore.
Meanwhile, easing crude prices provided an additional positive factor for India. Brent crude fell nearly 1 per cent to around $101.27 a barrel in early trade.
Going ahead, investors are likely to track the RBI policy decision, crude oil prices, global bond yields and foreign fund flows for further direction. The ability of the benchmarks to sustain Monday’s gains could determine whether the recent market weakness gives way to a broader recovery.
