India's equity markets began Monday's trading on a good note despite a weak start for most Asian markets. The Sensex and Nifty opened up slightly, and information technology stocks were at the top of the list of companies that have gained in the morning.
At 9:25 a.m., the Sensex 30 was at 77,748.26, up 207.43 points, or 0.27%. Meanwhile, the Nifty 50 was at 24,301.70, up 49.70 points, or 0.20%.
The good opening came even as several Asian benchmark indices were in the red. Investors appeared to be comforted by a drop in crude oil prices and by expectations of foreign investment flows and a rise in the value of the rupee, and foreign investors looking to invest in stocks.
IT stocks lead early gains
IT stocks were prominent among the early gainers on the Sensex. Three technology companies were among the top five performers in the index during early trading.
Infosys led the rise with a climb of 1.40% while Tata Steel rose 1.10% and HCL Technologies gained 0.94%. HDFC Bank rose 0.89% and Tech Mahindra gained 0.71%.
The IT stocks’ strength was a major boost to the benchmark indexes and helped the Indian market to outperform the regional ones.
Prominent Sensex Gainers And Laggards
The early market performance showed a mixed trend across sectors.
| Stock | Movement |
|---|---|
| Infosys | +1.40% |
| Tata Steel | +1.10% |
| HCL Technologies | +0.94% |
| HDFC Bank | +0.89% |
| Tech Mahindra | +0.71% |
| Bajaj Finserv | -0.20% |
| Eternal | -0.23% |
| Sun Pharma | -0.36% |
| Asian Paints | -0.38% |
| Titan | -0.39% |
The laggards were Titan, Asian Paints and Sun Pharma; financial and consumer-focused stocks also saw some selling pressure.
Crude Oil Prices Fall
In addition, Indian equities got some support from the decline of international oil prices.
Brent crude fell $1.22, or 1.29%, to $93.17 a barrel and West Texas Intermediate crude fell $1.20 to $85.86.
The decline followed gains of more than 5 percent for both benchmarks during the previous week. Investors booked profits ahead of an expected US announcement on tighter sanctions on Iran.
For India, lower crude prices could be a relief because the country is heavily dependent on imported oil. A sustained moderation in crude prices could also decrease pressure on inflation, the current account and the rupee.
Rupee Gains Against US Dollar
The Indian rupee also opened stronger on Monday.
The currency rose 7 paise to Rs 95.64 against the US dollar in early morning.
The improvement came with lower crude prices and expectations of foreign institutional investor inflows. However, the rupee is still sensitive to global oil prices, US monetary policy, bond yields and foreign capital flows.
Asian markets are under pressure of late
India's shares outperformed most other major Asian markets in early trading.
At 9 a.m., GIFT Nifty was up 0.29%, while Japan’s Nikkei 225 fell 0.43%, Singapore’s Straits Times dropped 0.10%, Hong Kong’s Hang Seng fell 2.09%, and Taiwan’s Weighted Index fell 0.21%.
South Korea's KOSPI was among the laggards and fell 3.30%. Thailand's SET Composite was down 1.01%, Indonesia's Jakarta Composite fell 0.33%, and China's Shanghai Composite was down 0.72%.
The divergence highlighted the relative resilience of Indian equities despite poor regional sentiment.
Indian market performance last week
The domestic market had ended Friday's session almost flat. The Sensex finished at 77,540.83, up only 3.11 points, while the Nifty at 24,252, up 20.15 points.
In the last week, however, the Sensex declined 468.42 points, or 0.60%, while the Nifty fell 114 points, or 0.46%.
Market sentiment had been cautious because of high crude prices, rising global bond yields and turbulence in the global economy.
As crude prices have weakened in the morning trade and the rupee has improved a bit, investors will now see if the early positive trend in Sensex and Nifty can stay through the day. Global cues, foreign fund flows, oil prices, and what will happen to Iran-related sanctions will not be lost on investors.
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