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US and Indian markets rallied Tuesday morning, driven by bargain hunting and optimism ahead of key economic data releases. The Nifty opened at 24,999.40, up from Monday’s close of 24,936.40, while the Sensex started the day at 81,768.72, rebounding from its previous close of 81,559.54.
“This Tuesday, the Nifty is poised to regain ground after recent losses, driven by optimism in the market,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd. He cited strong buying from foreign and domestic institutional investors as contributing factors.
Investors are closely watching two upcoming US inflation reports and the Federal Reserve’s September 18th meeting. “Traders will closely monitor two inflation reports, including the US CPI for August and producer price data,” Tapse added.
The FMCG sector led gains, rising 2 per cent, while energy and oil & gas indices declined over 1 per cent. Divi’s Lab topped the gainers list on the NSE, up 2.38 per cent, followed by Hero Motocorp at 1.82 per cent. SBI Life was the biggest loser, down 2.53 per cent.
Vikram Kasat, Head - Advisory at PL Capital - Prabhudas Lilladher, noted, “US markets remain cautiously optimistic, reflecting hopes that rate cuts will avoid a downturn.”
Global cues were mixed, with Asian markets showing varied performance. The Nikkei made marginal gains, while the Hang Seng slumped due to concerns over China’s economy.
Crude oil prices remained volatile, with Brent falling to an 18-month low below $71 per barrel. Rahul Kalantri, VP Commodities at Mehta Equities Ltd., commented, “The strengthening dollar index and concerns over Chinese demand are capping crude oil’s gains.”
Gold steadied at $2,500 per ounce as traders awaited the Fed’s September meeting. “Traders continue to await the Fed’s September meeting, widely expected to result in an interest rate cut,” Kalantri added.
As markets digest recent volatility and anticipate crucial economic indicators, analysts advise caution. Hardik Matalia, Derivative Analyst at Choice Broking, suggested, “It is advisable for market participants to exercise caution and adopt a more selective, stock-specific approach to their investments.”
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