The Indian stock indices remained firm on Tuesday with most of the sectoral indices posting gains in early trade. Benchmark indices Sensex and Nifty were at 65,775.44 and 19,579.00, respectively, up by around 0.2 to 0.3 per cent from the previous day's closing.
The Chief Investment Strategist at Geojit Financial Services, VK Vijayakumar said, "A significant trend in the market is the strength in IT index which is up 4.2 per cent in a week. Mid-cap IT has been doing well and now large-caps like HCL Tech, Infosys and Wipro have joined the rally. The order pipeline of IT companies is expected to improve on the back of the expected soft landing of the US economy."
Last week, the Indian stock markets ended a five-week losing streak to gain nearly a per cent. The Indian economy is witnessing a firm GDP growth rate of 7.8 per cent in the first quarter (April-June) of 2023-24 and is likely to result in improved investors' sentiment of late. With a GDP growth of 7.8 per cent, India remains the fastest-growing major economy in the world.
In light of that, Morgan Stanley has upwardly revised their economic growth forecast for India for the fiscal year 2024 after April - June quarter data showed it grew at its quickest pace in a year.
The multinational investment bank raised its growth forecast to 6.4 per cent from its earlier estimate of 6.2 per cent.
Also, foreign portfolio investors (FPIs) have remained net buyers in Indian stock markets for the sixth straight month till August, a positive for markets, according to data from the National Securities Depository (NSDL). So far in 2023, they have bought equity assets worth Rs 1.38 lakh crore on a cumulative basis.
However, there remains a concern as the rise in inflation lately has led to some uneasiness among investors. The benchmark Sensex is now hovering at its off-high, with June and July inflation figures relatively having depressed the market sentiments. Retail inflation in India rose sharply in July to 7.44 per cent, in the process breached RBI's 6 per cent upper tolerance target, largely due to a sharp spurt in vegetable, fruit, and pulses prices.
SVP - Technical Research at Religare Broking, Ajit Mishra said, "Amid all, we reiterate our view to focus on stock selection and preferring auto, IT and metal for long trades."
