Sensex, Nifty open higher after hitting 5-month low; oil, Fed decision cap gains

The BSE Sensex opened at 74,249.31 and was at 74,208.83 at 9:36 am, up 205.01 points or 0.28% from the previous close. The Nifty 50 opened at 23,201.60 and was at 23,188.10, up 69.50 points or 0.30%.

In Short

• Benchmark indices opened higher, rebounding from 5-month low
• Mid- and small-cap stocks continued to face selling pressure
• Paytm and Mobikwik rose on new NPCI discount rate announcement

Benchmark indices opened higher on Wednesday, rebounding after the Nifty 50 closed at a five-month low in the previous session. However, elevated crude oil prices, high US bond yields and caution ahead of the Federal Reserve's policy decision kept gains in check.

The BSE Sensex opened at 74,249.31 and was at 74,208.83 at 9:36 am, up 205.01 points or 0.28% from the previous close. The Nifty 50 opened at 23,201.60 and was at 23,188.10, up 69.50 points or 0.30%.

The opening rebound comes after the Sensex had fallen 777.94 points and the Nifty 50 declined 279.50 points on Tuesday. Both benchmarks are in oversold territory, and traders said a technical bounce cannot be ruled out from current levels.

The broader market was mixed at the open. Nifty 100 gained 0.18% and Nifty 200 rose 0.03%, while Nifty 500 slipped 0.14%.

Mid- and small-cap stocks continued to face selling pressure. Nifty Midcap 50 fell 0.46%, Nifty Midcap 100 declined 0.55% and Nifty Smallcap 100 dropped 1.10%.

India VIX, however, declined 0.91% to 13.31.

IT, AUTO AND FMCG STOCKS SUPPORT MARKET

Several heavyweight stocks were trading higher. M&M was the top Sensex gainer, rising 1.56%, followed by HCLTech, which gained 1.42%. Reliance Industries rose 1.19%, ITC gained 1.14% and SBI was up 0.99%.

Hindustan Unilever rose 0.78%, while BEL, Adani Ports, Axis Bank, Bajaj Finance and Kotak Mahindra Bank also traded in positive territory.

On the losing side, IndiGo fell 1.27%, while Tata Steel declined 0.71%. Eternal fell 0.62%, TCS declined 0.57% and NTPC slipped 0.74%. Bharti Airtel fell 0.32% and HDFC Bank was down 0.10%.

Nifty Auto gained 0.42%, while Nifty FMCG rose 0.91%. Nifty PSU Bank gained 0.58%, Nifty Private Bank rose 0.23% and Nifty Oil & Gas advanced 0.38%.

However, Nifty IT fell 0.22%, while Nifty Media declined 0.43%. Nifty Metal dropped 0.29%, Nifty Pharma fell 0.74% and Nifty Healthcare declined 0.65%.

Nifty Chemicals fell 0.80%, Nifty MidSmall IT & Telecom declined 0.98% and Nifty Consumer Durables slipped 0.50%.

PAYTM, MOBIKWIK IN FOCUS

Paytm, One Mobikwik and Yes Bank rose between 2.7% and 5% after the NPCI announced a 0.4% merchant discount rate on select person-to-merchant transactions above Rs 2,000 from October 15.

Pine Labs, which had initially gained around 2.2%, later reversed the move and was trading 3.6% lower.

Brent crude was trading at $108.08 a barrel, down 0.62%, while WTI crude was at $104.77, down 1%. Despite the early decline, oil prices remain elevated after Brent closed at a near four-month high on Tuesday.

Markets are also awaiting the US Federal Reserve's policy decision later today. Expectations of a rate hike have kept investors cautious. Higher US rates can make emerging markets such as India less attractive to global investors and can also affect sectors such as IT, which derive a significant share of revenue from the US.

Foreign institutional investors recorded net outflows of Rs 2,977.86 crore from domestic markets on Tuesday, while domestic institutional investors were net buyers with inflows of Rs 2,686.05 crore, according to provisional NSE data.

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said the market's weak structure remained intact despite the opening rebound.

"The weak market construct continues with elevated US bond yields and high crude prices contributing significantly to the weakness. So long as these two crucial macros remain high it would be unrealistic to expect a strong rebound in the market," Vijayakumar said.

He said foreign investors had been sellers for the last five days and could continue selling into small rallies while the US 10-year yield remains around 5%.

On the Fed decision, Vijayakumar said, "In today’s meeting, the Fed is most likely to raise interest rates by 25 bp. However, this is unlikely to impact the market since it is already discounted by the market. More market moving will be the Fed commentary on the evolving macro-outlook and the likely rate action going forward."

He added that there are stock-specific developments to watch despite the broader market weakness, including the expected appointment of a new MD and CEO at HDFC Bank and the new MDR norms for digital transactions introduced by NPCI.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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