Sensex, Nifty open higher as auto stocks lead; monsoon worries keep gains in check

Indian benchmark indices opened higher as auto stocks led a recovery from Tuesday's losses. Gains stayed limited as monsoon concerns and stalled US-Iran talks kept investors cautious.

In Short

• Nifty Media led sector gains with 1.63%, Nifty Metal fell 0.72% as biggest laggard
• Mahindra & Mahindra topped gainers with 2.05%, Bajaj Finserv declined 2.13%
• Broader market indices like Nifty 100 and Nifty 500 showed modest gains

Benchmark stock market indices started the session on a positive note, recovering from Tuesday's losses as buying in auto stocks lifted sentiment. However, the market quickly turned range-bound as investors assessed the impact of deficient rainfall and the lack of progress in US-Iran peace talks.

The BSE Sensex rose 181.28 points to 76,659.95, while the NSE Nifty50 gained 49.90 points to trade at 23,915.65 in early trade.

The broader market also remained firm. The Nifty 100 gained 0.17%, while the Nifty 200 rose 0.17%. The Nifty 500 advanced 0.20%, the Nifty Midcap 50 gained 0.29%, the Nifty Midcap 100 added 0.15% and the Nifty Smallcap 100 climbed 0.38%. India VIX, however, gained 2.72%, indicating investors remained cautious despite the positive opening.

SECTORAL INDICES

Sectoral performance remained largely positive.

Nifty Media emerged as the top-performing index after gaining 1.63%. Nifty Consumer Durables rose 0.97%, followed by Nifty Auto, which gained 0.87%. Nifty FMCG advanced 0.75%, Nifty IT rose 0.54%, Nifty Realty gained 0.46%, Nifty Pharma climbed 0.31%, Nifty MidSmall Financial Services added 0.30%, Nifty 500 Healthcare gained 0.25%, Nifty MidSmall Healthcare rose 0.24%, Nifty Healthcare Index advanced 0.21%, Nifty Private Bank gained 0.16% and Nifty PSU Bank edged up 0.03%.

On the other hand, Nifty Metal was the biggest laggard after losing 0.72%. Nifty MidSmall IT & Telecom declined 0.41%, Nifty Chemicals fell 0.21%, Nifty Financial Services lost 0.18%, Nifty Financial Services 25/50 slipped 0.18%, Nifty Oil & Gas declined 0.05% and Nifty Financial Services Ex-Bank edged down 0.01%.

TOP GAINERS AND LOSERS

Among Sensex stocks, Mahindra & Mahindra was the biggest gainer after rising 2.05%. Eternal gained 1.70%, Titan advanced 1.44%, Hindustan Unilever rose 1.35%, Infosys climbed 0.91%, Sun Pharma rose 0.79%, TCS gained 0.78% and Kotak Mahindra Bank advanced 0.74%.

On the losing side, Bajaj Finserv declined 2.13%. Tech Mahindra lost 0.65%, NTPC slipped 0.49%, Bajaj Finance fell 0.47%, Larsen & Toubro declined 0.45%, ICICI Bank lost 0.45%, while Trent, Asian Paints and Tata Steel also traded in negative territory.

MONSOON EMERGES AS THE BIGGEST RISK

Brent crude continued to trade near 73 dollars a barrel, helping keep India's inflation outlook favourable. However, Asian markets slipped as investors tracked developments in the US-Iran peace negotiations after Iran said it would not meet senior US officials for fresh talks.

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the biggest concern for the Indian market has shifted from geopolitics to the monsoon.

"The major concern weighing on the market now is the poor monsoon which so far has been worse than expected. June has ended with 40% rain deficit and for July, the IMD has predicted below normal rainfall. If this trend continues, the actual rainfall this monsoon season may fall below the IMD's forecast of 90% of the long-term average. The market has not yet discounted this negative trend," he said.

Vijayakumar advised investors to gradually reposition portfolios towards sectors that are relatively insulated from weak rural demand.

"Partial portfolio adjustment in favour of fixed income may be considered. Also, churning of portfolios in favour of monsoon-proof sectors like healthcare, pharmaceuticals, power and select fairly valued defence stocks is advisable," he added.

(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.)

- Ends