Sensex, Nifty open higher as IT and auto stocks gain

Benchmark stock market indices opened Tuesday’s trading session on a positive note, supported by gains in information technology (IT) and auto stocks.
The S&P BSE Sensex was up 147.39 points to 84,447.17 at 10:02 am, while the NSE Nifty50 gained 34.75 points to trade at 25,845.60.
All the other broader market indices also traded in positive territory in early trade as volatility dipped.
Most of the Nifty sectoral indices also gained as the mood on Dalal Street seems to have improved after yesterday’s downturn.
The top five gainers on the Nifty50 were TechMahindra, Infosys, Shriram Finance, Bajaj Finserv and M&M.
On the other hand, the top losers were Asian Paints, Titan, JSW Steel, Tata Steel and Sun Pharma.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The unusual volatility in stock markets is reflected in the 8% spike in Shanghai Composite Index and the 4.8% crash in Nikkei index yesterday. This extreme volatility is likely to stabilise soon.”
“The hoped-for-recovery in the Chinese economy has triggered massive fund flows into Chinese stocks. This has delivered 20% returns in Shanghai composite in the last five days and 19.45% return in Hang Seng in the last one month. This momentum is attracting FIIs; but it remains to be seen how long this tactical trade will last,” he added.
He went on to say that FII selling is likely to be absorbed by DII buying and, “therefore, it is unlikely to do serious long-term damage to the market”.
“Since a significant part of FII holding is in banking stocks, this segment may continue to face downward pressure. This will provide opportunities for long-term investors to buy the frontline banking stocks,” he added.
“This segment is attractively valued and the sector is doing well. The worsening geopolitical situation in West Asia is becoming an area of concern.”