The stock markets on Thursday opened marginally higher despite rising global volatility, as a rise in shares of oil marketing companies and IT shares helped the 30-share Sensex and the broader Nifty 50 to open in the green. The BSE Sensex opened at 34,208 points, more than 100 points higher since yesterday’s close of 34,082 points, while Nifty opened above the psychological mark of 10,500 at 10,518 after closing yesterday at 10,476 points. Shares of Infosys, Hero Motocorp, HDFC Bank, Axis Bank gained more than 1% each, helping the 30-share index to be in the positive territory. Shares of Powergrid, Sunpharma, NTPC and Tata Steel lost nearly 1% eaach in the Sensex. Top gainers in the 50-share Nifty include HPCL, Aurobindo Phamra, BPCL, ONGC and Coal India which gained more than 1% each. Nifty futures on the Singapore Stock Exchange were trading 143.30 points, or 1.37 per cent, lower at 10,639, indicating a marginally lower opening in India.
Yesterday, the markets took a breather after a three-day long sell-off and ended lower with the Sensex losing 113 points to settle at 34,082.71 after the Reserve Bank of India kept the repo rates unchanged at 6%. Shares of OMCs (oil marketing companies) such as HPCL, BPCL and IOC rallied while the stock of India’s largest private sector bank HDFC Bank bled. The benchmark Sensex had lost 113.23 points or 0.33% to finish at 34,082.71 and the broader Nifty shed 21.55 points or 0.21% to conclude at 10,476.7.
After the vicious global stock market sell-off witnessed over the course of last week, India’s apex bank RBI noted that the financial markets have become volatile due to concerns surrounding the pace of normalisation of the US Fed monetary policy especially after a report released by the US Labor Department said that wages shot up in recent times, adding to the fear of rising inflation. “Financial markets have become volatile in recent days due to uncertainty over the pace of normalisation of the US Fed monetary policy in view of January payrolls data showing rapidly accelerating wage growth and better than expected employment,” RBI said in its Sixth Bi-monthly Monetary Policy Statement released yesterday.
Angel Broking says that the volatility could remain on the higher side in the near term. “We reiterate that traders need to be very selective as the volatility is likely to remain on the higher side and also with such global issues; the opening direction is mainly dictated by the overnight cues from the global markets. Hence, one should avoid taking any kind of undue risks and should rather remain light on positions. In fact, it would be a prudent ploy to stay light and avoid making any kind of bottom fishing till the definite signals emerge,” the firm said in a note.