NEW DELHI: Equity benchmark indices climbed in early trade on Tuesday due to buying in blue-chip stocks such as HDFC Bank and ICICI Bank, as well as foreign fund inflows. Sensex started strong and gained 376.38 points to reach 73,879.02 in early trade.
Nifty
also rose by 85.55 points to reach 22,418.20.
TCS, HDFC Bank, Reliance Industries, Axis Bank, ICICI Bank, IndusInd Bank, Infosys, Larsen & Toubro, and Bharti Airtel were among the major gainers.
V K Vijayakumar, chief investment strategist at Geojit Financial Services said that the current trend in the market is a correction in the broader market, particularly in small-cap stocks. The small-cap index has fallen 7.8% from its peak, and this correction is expected to continue due to excessive valuations. Regulatory actions are also likely in the small-cap segment, as the regulator Sebi has expressed concerns about frothy valuations.
He further said that there may be redemptions from small-cap funds, adding to the downside. While quality large-cap stocks are expected to bounce back after the correction, small caps are unlikely to recover in the near term. PSE stocks that have experienced rapid growth are also likely to face selling pressure.
Stocks that witnessed a decline included ITC, Nestle, JSW Steel, UltraTech Cement, NTPC, and Tata Steel.
In Asian markets, Hong Kong and Seoul were trading higher, while Tokyo and Shanghai were in negative territory. The US markets closed on a mixed note on Monday.
According to exchange data, Foreign Institutional Investors (FIIs) purchased equities worth Rs 4,212.76 crore on Monday. On Monday, the BSE benchmark index declined by 616.75 points or 0.83% to settle at 73,502.64, while the Nifty slumped by 160.90 points or 0.72% to close at 22,332.65.
Global benchmark Brent crude oil rose by 0.35% to reach $82.50 per barrel.