Sensex up 138 points intraday, Nifty above 17,300

Benchmark indices were trading in the green during the afternoon on Tuesday.

Market opened on a positive note amid firm cues from the Asian markets and easing retail inflation. Market extended gains, led by a sharp rebound in bank stocks. Auto, IT and consumer durables also gained while indices were dragged by losses in metals. 

At 1 pm, the BSE Sensex was trading at 58,315.81, up 138.05 points or 0.24 per cent. It hit an intraday high of 58,482.62 and a low of 58,309.42.

The Nifty 50 was trading at  17,392.50, up 37.20 points or 0.21 per cent. It hit an intraday high of 17,438.55 and a low of 17,389.10.

IndusInd Bank, Hero MotoCorp, HCL Tech, Kotak Bank and Bajaj Auto were the top gainers on the Nifty 50 while Hindalco, Ultratech Cement, BPCL, Tata Steel and HDFC were the top laggards. 

CPI numbers ease inflation worries

The Consumer Price Index (CPI)-based retail inflation declined to 5.3 per cent in August from 6.69 per cent in the same month a year ago while food inflation was down to 3.11 per cent from 9.05 per cent in August 2020. With the latest inflation numbers, experts expect the Reserve bank of India to reinforce its accommodative stance in the next MPC meet. This positively impacted the buying sentiment among investors. 

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said, "The better than expected CPI inflation numbers which came in at 5.3 per cent for August is very positive news. MPC can be expected to continue with the accommodative stance for an extended period of time."

Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank said, "The headline inflation came in softer than our expectations largely led by the downward surprise of food prices. We expect the subsequent readings to remain fairly benign and much lower than RBI estimates. The softer inflation would provide relief to the policymakers and more room to move much slower in terms of policy normalization. We continue to expect only tweaks to liquidity tools to manage temporary liquidity surplus in the near term."

Metals lose shine

On the sectoral front, a majority of indices were in the green. While bank stocks,  auto, IT, consumer durables and oil & Gas stocks gained, metals and FMCG faced pressure.

Nifty Metal was down 0.59 per cent while Nifty FMCG was down 0.13 per cent. 

Meanwhile, Nifty Bank was trading 0.39 per cent higher. Nifty Private Bank and Nifty PSU Bank were up 0.89 per cent and 0.23 per cent, respectively. Nifty Auto and Nifty Consumer Durables were up 0.63 per cent, each. Nifty IT was up 0.69 per cent. Nifty Oil & Gas was up 0.43 per cent. 

Midcaps shine

On the sectoral front, broader indices were in the green, outperforming the benchmarks as midcaps recorded significant gains.

Nifty Midcap 50 was up 1.32 per cent while Nifty Smallcap 50 was up 0.19 per cent. The S&P BSE Midcap was up 0.84 per cent while the S&P BSE Smallcap was up 0.43 per cent. 

The volatility index softened 2.08 per cent to 13.73.

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