Sensex, Nifty open higher as crude cools, US yields fall; IT stocks drag

At 9:37 am, the Sensex was trading at 74,927.04, up 68.05 points, or 0.09%, from its previous close of 74,858.99. The index opened at 74,901.50. At 9:40 am, the Nifty 50 was at 23,445.30, up 31 points, or 0.13%, after opening at 23,454.05.

In Short

• Benchmark indices opened higher tracking Wall Street and Asian gains
• Crude prices ease, US bond yields fall, boosting investor sentiment
• Experts suggest sectoral pivot to large-caps amid geopolitical concerns

Benchmark indices opened higher on Tuesday, tracking gains in Wall Street and Asian markets as easing crude oil prices and lower US Treasury yields improved investor sentiment. Investors were also watching for possible diplomatic engagement between the US and Iran at the United Nations General Assembly this week.

At 9:37 am, the Sensex was trading at 74,927.04, up 68.05 points, or 0.09%, from its previous close of 74,858.99. The index opened at 74,901.50. At 9:40 am, the Nifty 50 was at 23,445.30, up 31 points, or 0.13%, after opening at 23,454.05.

The opening gains came after the Sensex and Nifty rose on Monday, helped by bargain-buying following six consecutive weekly declines. Investors are now weighing easing oil prices and global cues against continued geopolitical tensions and foreign investor selling.

Brent crude was trading at $101.26 per barrel, up 0.92%, while WTI crude stood at $92.99, up 0.67%, according to the market data at the time of the update.

Crude had fallen for four consecutive sessions through Monday as investors assessed the possibility of diplomatic progress between the US and Iran. Oil prices remain particularly important for Indian markets because sustained high crude prices can add to inflationary pressures and increase the country's import bill.

The market is also tracking US bond yields. The benchmark US 10-year Treasury yield fell on Monday, helping improve sentiment towards equities.

Global cues were positive on Tuesday. The Nasdaq had closed at a record high overnight, while Asian markets also gained in morning trade.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.5%, supporting the broader risk appetite.

The positive global setup has provided some relief to Indian equities after the recent six-week losing streak. The Nifty has risen over the past four sessions as investors returned to selected stocks following the sharp correction.

HDFC BANK LEADS GAINS

HDFC Bank was among the biggest gainers in the Sensex pack, rising 1.12% to Rs 748.30.

Eternal gained 0.94%, Adani Ports rose 0.88% and IndiGo advanced 0.71%. Maruti Suzuki gained 0.46%, Asian Paints 0.42% and Titan 0.41%.

BEL, ICICI Bank, Power Grid, NTPC and Larsen & Toubro were also trading higher.

HDFC Bank's strength is particularly relevant as market experts have been pointing to signs of a possible shift towards fairly valued large-cap stocks after the recent correction.

IT STOCKS UNDER PRESSURE

The opening gains were capped by weakness in IT stocks.

HCLTech was the biggest loser among the Sensex stocks, falling 1.98%. Infosys declined 1.04%, Tech Mahindra fell 1.02% and TCS was down 0.76%.

Sun Pharma and Cement also declined 0.48% each, while Hindustan Unilever fell 0.21% and Bharti Airtel declined 0.16%.

The Nifty IT index was down 1.06% at 9:40 am.

The broader market was stronger than the benchmark indices at the opening.

The Nifty 100 rose 0.17%, while the Nifty 200 gained 0.19% and Nifty 500 advanced 0.23%. The Nifty Midcap 50 and Nifty Midcap 100 gained 0.27% and 0.26%, respectively.

The Nifty Smallcap 100 was the strongest among the broad-market indices, rising 0.46%.

India VIX, a measure of expected market volatility, fell 2.08% to 11.01.

The sectoral picture was mixed, although several sectors were trading higher.

Nifty Financial Services 25/50 rose 0.46%, while Nifty Realty gained 0.64%. Nifty Media advanced 0.68%, Nifty Metal rose 0.27% and Nifty Private Bank gained 0.32%.

Nifty Chemicals was up 0.72%, while Financial Services Ex-Bank and MidSmall Financial Services gained 0.48% and 0.58%, respectively.

On the other hand, Nifty IT fell 1.06%, Nifty Consumer Durables declined 0.26% and Nifty Healthcare fell 0.07%. MidSmall IT & Telecom was also down 0.34%.

Dr V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, "Slight cooling in crude prices and U.S. 10-year bond yields has helped to bring risk-on sentiments in the U.S. equity markets. This positive development will reflect in other equity markets, too. In India, there will be renewed focus on the secondary market since the NSE IPO is over and as refunds start coming in that will add to the liquidity in the market."

He said it was time for a sectoral pivot towards fairly valued large-caps, adding that there were early signs of this in the firming up of HDFC Bank stock.

"Better growth prospects and momentum are in favour of SMIDs," Vijayakumar said.

He also said that with precious metals stabilising and fixed-income returns becoming attractive, investors could consider a multi-asset strategy to balance growth prospects with protection against volatility.

Geopolitical developments remain a key trigger for markets.

The US and Iran exchanged threats on Sunday, although US President Donald Trump said he was open to meeting Iranian President Masoud Pezeshkian, who is expected to be in New York this week for the UN General Assembly.

Any progress towards talks could help ease concerns around oil supply and crude prices. However, a fresh escalation could put pressure on oil and revive inflation concerns for global markets.

For Indian equities, the immediate focus remains on crude prices, global bond yields, foreign fund flows and whether the recent recovery after six weeks of losses can continue.

(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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