Tech stocks lead cautious market open amid inflation expectations

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The markets opened with a marginal positive bias on Thursday, with the Sensex opening slightly lower at 81,476.76 from its previous close of 81,526.14 but has gained momentum, trading at 81,665.14 as of 9.40 AM, up by 139 points or 0.17 per cent. Similarly, the Nifty opened at 24,604.45 compared to its previous close of 24,641.80 and is now at 24,661.80, rising by 20.00 points or 0.08 per cent.

Technology stocks emerged as key performers in the morning trading session. Tech Mahindra led the Nifty 50 gainers with a 2.00 per cent increase, followed by Bharti Airtel at 0.99 per cent and TCS at 0.68 per cent. The technology sector received a boost from global markets, with the Nasdaq Composite recently crossing the 20,000 mark for the first time.

“The rally in tech stocks is driven by hopes of looser regulations and optimism around AI-driven earnings growth in the coming quarters,” noted Ameya Ranadive, Senior Technical Analyst at StoxBox. The global technology sector’s performance is providing additional momentum to Indian IT stocks.

On the flip side, healthcare and consumer stocks faced some selling pressure. Apollo Hospitals declined by 1.20 per cent, while SBI Life dropped 1.07 per cent. Titan lost 0.95 per cent, indicating potential challenges in the consumer discretionary segment.

The market’s direction is currently being influenced by multiple factors, including global economic indicators and domestic inflation expectations. “The range-bound consolidation construct of the market is set to continue,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “The global market rally remains intact, supported by the US markets.”

Investors are closely watching today’s domestic inflation data, which could provide further insights into potential monetary policy decisions. The U.S. Consumer Price Index (CPI) for November, which came in at 2.7 per cent year-on-year, has already raised expectations of a potential 25 basis points rate cut by the Federal Reserve on December 18.

“A bullish consolidation appears to be the theme for the day, with optimism around a potential ‘Santa Rally’ – the typical year-end stock market surge,” highlighted Prashanth Tapse from Mehta Equities Ltd. The market sentiment is further bolstered by the 96 per cent probability of a rate cut, up from 86 per cent before the CPI release.

Sector-specific movements are also capturing market attention. FMCG stocks are in focus after Britannia’s price hike of 3-5 per cent, while cement stocks are experiencing price increases of Rs 5-10 per 50 kg bag. Rail stocks are expected to remain positive due to strong government order books and new metro rail network additions.

Commodity markets are showing interesting trends. Gold prices surged to $2,756.70 an ounce, while Brent Crude gained to above $73 per barrel, supported by expectations of improved global demand and potential geopolitical developments.

“The market has formed a short-term ‘pennant’ with highs falling and lows rising, which means the potential for an upside breakout targeting the 24800-25000 hurdle zone remains high,” explained Akshay Chinchalkar, Head of Research at Axis Securities.

The market continues to demonstrate resilience, with advancing shares outnumbering declining shares for the fourteenth consecutive day—a rare occurrence not seen in a decade. As trading continues, investors remain cautiously optimistic about the market’s potential trajectory.