Sensex, Nifty rise after 2 days of profit-booking, largecap flavour plays out

After two-days of profit-booking, domestic markets traded on a positive note on January 4, supported by gains in largecaps like Bajaj twins, HDFC Bank, and Reliance Industries.

The benchmark BSE Sensex was up 0.4 percent to 71,700, while the NSE Nifty 50 rose 0.4 percent to 21,606 levels, as of 10am.

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Analysts see the upside in Thursday’s trade as ‘normal’ after two days of fall and expect the bullish undertone to remain intact in the near-term, thanks to strong fundamentals.

“Since October, the markets have been rising after two days of fall. And we expect the momentum to continue over the next few sessions as well. We are seeing sectoral rotation to largecaps from midcaps and smallcaps being played out,” said Vinit Bolinjkar, research head at Ventura Securities.

In the last few days, global markets saw some corrections and the trigger has been profit-booking. Overnight, the US markets ended on a negative note after the FOMC minutes reading revealed uncertainty in rate cut timeline.

The Fed policymakers said that the rates could be restrictive for longer than anticipated last month, noting rate cuts could emerge before the year is out. Swap traders have been reining in their bets on rate cuts after factoring in a full quarter-point cut to the benchmark rate by the March meeting.

Back home, traders are also eyeing India Inc’s October-December quarter (Q3FY24) results, which will further solidify investors’ belief on stock-picking strategy and support the bull trend.

Also read: Short Call | Healthy correction or injurious one? Bajaj Auto buyback, DMart’s demanding investors

Broader indices outperformed the benchmarks as the BSE Midcap and the BSE Smallcap indices climbed up to 1 percent.

Spelling out investment strategy for the coming days, VK Vijayakumar, chief investment strategist at Geojit Financial Services, advised investors to move some money from the overpriced midcaps and smallcaps to the fairly priced high-quality largecaps like banking marques.

The star sectoral performer in morning deals was Nifty Realty as it soared over 4 percent. Other top performers included Nifty Financial Services, Metal, and Oil & Gas.

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