Indian Stock Market Continues Upward Momentum for Third Straight Session
Indian equity benchmarks maintained their positive momentum on Wednesday, extending gains for the third consecutive trading session. The Nifty50 and BSE Sensex both opened in the green, reflecting improving investor sentiment driven by favorable global cues and domestic sector-specific developments.
Market Performance in Early Trade
In early trading, the Nifty50 index was observed trading above the 25,850 mark, while the BSE Sensex rose by over 100 points. At 9:18 AM, specific figures showed the Nifty50 at 25,861.55, marking an increase of 42 points or 0.16%. Simultaneously, the BSE Sensex stood at 83,854.33, up by 120 points or 0.14%.
Expert Insights on Market Trends
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, provided valuable analysis on the current market dynamics. He emphasized a significant shift in investor focus towards mid and smallcap stocks, which have made a notable comeback based on Q3 results.
"An important takeaway from Q3 results is the comeback of the mid and smallcaps," Dr. Vijayakumar stated. "Improvement in earnings recovery and indications of continuation of this uptrend have brought the mid and smallcaps back to the radar of investors."
He further noted that at the institutional level, there is a clear trend of selective accumulation in these segments. Even mutual funds, which had previously expressed valuation concerns, are now approaching mid and smallcaps with renewed optimism.
Valuation Analysis and Sector Prospects
Despite the renewed interest, Dr. Vijayakumar highlighted a disparity in valuations. Largecap stocks currently offer valuation comfort, whereas mid and smallcaps are trading at significantly higher multiples. Specifically, the Nifty is trading at approximately 20 times estimated FY27 earnings, while the NSE midcap and smallcap indexes are at 28 and 24 times, respectively.
"This makes this market a stock picker's market," he remarked, suggesting that careful selection is crucial. He identified several sectors with promising prospects, including financials, autos, capital goods, pharmaceuticals, and hotels.
Global Market Influences
The positive sentiment in Indian markets was bolstered by strong performances in global equity markets. Wall Street finished in the green, primarily driven by a rise in major technology stocks such as Nvidia and Amazon. This rebound came after recent volatility linked to artificial intelligence concerns.
Nvidia, in particular, gained 1.6% following the announcement of a multi-year agreement to supply millions of its current-generation chips to Meta Platforms. Asian markets also moved higher, benefiting from the rebound in technology shares and robust US economic data, which collectively boosted investor confidence.
Commodity and Currency Movements
Oil prices retained their gains after registering the sharpest rise since October, adding to the positive market environment. On the currency front, the US dollar steadied, holding onto recent gains. This stability followed minutes from the Federal Reserve indicating that policymakers are not in a hurry to lower interest rates, with some remaining open to potential rate hikes if inflation persists.
Institutional Investment Activity
Investment flows further supported the market uptrend. Foreign portfolio investors were net buyers of equities worth Rs 1,154 crore on Wednesday. Additionally, domestic institutional investors purchased shares worth Rs 440 crore, demonstrating sustained confidence from both foreign and local investors.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India.
