Domestic equity benchmarks opened higher on Friday, driven by strong buying in information technology (IT) stocks following an announcement by the US government regarding the Permanent Labor Certification Program (PERM).
The Sensex opened at 71,776.67, up 183.43 points or 0.26 per cent. Meanwhile, the Nifty started the trading session at 22,314.95, gaining 83.15 points or 0.37 per cent.
Sector-wise, Nifty IT led the gains, surging more than 3 per cent to 28,604.75 and hitting an intraday high during morning trade. Nifty MidSmall IT & Telecom also rose more than 2 per cent to 9,825.85.
Meanwhile, Nifty FMCG, Nifty Media, Nifty Healthcare, Nifty Realty and Nifty Private Bank gained up to 1 per cent in early trade.
Market experts said elevated crude oil prices and high US bond yields continue to weigh on the market, creating a near-term structure characterised by selling on rallies. They added that sustained selling by foreign institutional investors (FIIs) has encouraged bears to take short positions even in fundamentally strong blue-chip stocks.
“Given the elevated crude prices and high US bond yields, FIIs are likely to continue selling in the near term, irrespective of favourable valuations, particularly of large-caps,” they said.
However, market history shows that periods of crisis can present opportunities for investors. The ongoing corrective phase has opened up opportunities for patient long-term investors to accumulate high-quality stocks.
On the technical front, analysts said the 22,050 level, which they had identified at the beginning of the week, was now within reach, bringing the 19,000 and 16,700 levels back into focus.
They noted that the market’s position near the lower Bollinger Band could support a potential recovery during the day. However, upside expectations are likely to remain limited as long as the Nifty stays within the 22,290–22,350 range. A sustained move above this band could open the way towards 22,440–22,600, while the downside support for the day was placed near 22,140.
Global cues remained mixed, with weakness in US technology stocks and elevated crude oil prices amid tensions in the Middle East weighing on investor sentiment. Some easing in US bond yields, however, offered limited relief.
Meanwhile, FIIs remained aggressive net sellers on Thursday, offloading equities worth Rs 12,943 crore. Domestic institutional investors (DIIs) provided support to the market with net purchases of Rs 10,703 crore.
FIIs have sold equities worth Rs 36,210 crore through exchanges so far in October.