Sensex gains on firm global cues, Nifty above 15,750: Key factors driving the market

NEW DELHI: Volatility eased and buying was seen across the board on Tuesday as bulls were in action once again buoyed by firm global cues. Realty stocks continued to be the biggest gainer, while banks and metals also provided support.

The global stock market rally continues unabated with the Dow, Nasdaq, S&P 500, and the pan European Stoxx 600 again setting new record highs. Markets are currently ignoring valuation concerns, said an analyst.

“The news from the inflation front is positive with June CPI coming at 6.26 per cent against an expectation of 6.5 per cent. This gives room for the RBI to continue the accommodative mode, further strengthening the bulls. While remaining invested in high-quality stocks, investors should not be carried by the exuberance in the market, particularly in smallcaps," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

How are the bluechips doing?
After opening in the green, benchmark indices maintained their lead. At 9.17 am, BSE flagship Sensex was up 233 points or 0.44 per cent to 52,606. NSE benchmark Nifty rose 62 points or 0.39 per cent to 15,754.

In the 50-share pack Nifty, ICICI Bank was the biggest gainer, up 1.29 per cent. Hindalco, Tata Steel, Bajaj Finance, Eicher Motors, UPL, SBI, Tata Motors and BPCL were among other gainers.

Tech Mahindra was the top loser in the pack, down 0.62 per cent. Adani Ports, HCL Tech, Infosys, Divi’s Labs and HDFC Bank were other losers in the pack.

FACTORS DRIVING MARKETS
Good news
Yields stay low: Concerns that climbing cases of the Delta variant around the world could derail a global economic recovery have fuelled appetite for safe-haven US Treasuries. The benchmark US 10-year bond yield fell last week to a five-month low of 1.25 per cent. While markets have since stabilised, yields are not far off 4-1/2 month lows at 1.3695 per cent.

Dollar falls: The dollar index was down about 0.1 per cent. A weaker dollar makes emerging market equities like India attractive.

US economy expectations: US consumers expect the economy to continue its rapid resurgence from the Covid-19 pandemic over the next year, with forecasts for inflation, earnings, income growth and spending all increasing in June, according to a monthly survey released on Monday by the New York Federal Reserve.

Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.80 per cent, while Nifty Midcap advanced 0.38 per cent. Broadest index on NSE, Nifty 500 was up 0.46 per cent.

Sunteck Realty, Tanla Platforms, Edelweiss Financial, Bharat Forge, Oberoi Realty and Prestige Estate were gainers from the space, while Dalmia Bharat, Voda Idea, Indiamart Intermesh, Vakrangee, PNB Housing and Westlife Developments were under selling pressure.

Global markets
MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.5 per cent, tracking a Wall Street rally overnight. The index is down 3.1 per cent so far this month.

Australian shares were up 0.49 per cent, while Japan's Nikkei stock index rose 0.79 per cent. China's blue-chip CSI300 index was down 0.1 per cent, while Hong Kong's Hang Seng index rose 0.65 per cent.

Overnight, Wall Street's main indices closed at their highest levels ever, lifted by Tesla and bank stocks. Tesla rallied over 4 per cent and was the top contributor to gains in the S&P 500 and Nasdaq.