Benchmark stock market indices opened flat on Wednesday as gains in metal and banking shares were offset by losses in IT sector stocks in early trade.
The S&P BSE Sensex was up 19.33 points to 83,470.29, while the NSE Nifty50 added 12.50 points to 25,737.90 as of 9:41 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that the better-than-expected Q3 results and indications of continuing momentum in earnings growth, going forward, are positive positive factors that will keep the market resilient.
The volatility in IT stocks may continue, in response to incoming news relating to the sector. Overall, IT stocks may remain weak since uncertainty surrounding the sector is huge and large institutional investors are unlikely to invest big time in IT stocks, unless valuations become compelling,” he added.
An hour after the opening bell, Kalyan Jewellers India Ltd led the Sensex gainers, rising 3.39%. It was followed by Tata Steel Ltd, which gained 2.39%. ITC Ltd moved up 1.11%, while Bajaj Finserv Ltd added 0.67%. Bajaj Finance Ltd also traded higher, rising 0.65%.
Infosys Ltd saw the sharpest fall, dropping 2.64%. Tech Mahindra Ltd declined 2.51%, HCL Technologies Ltd was down 2.12%, Tata Consultancy Services Ltd slipped 1.72%, and Adani Ports and Special Economic Zone Ltd fell 1.32%.
“There can be churns away from IT towards other sectors like banking and financials, automobiles, telecom, pharmaceuticals etc where there is good earnings visibility,” said Vijayjumar.
“This is the time to gradually increase exposure to equity. But many retail investors are increasing investments in gold and silver ETFs, which is a risky game in the present context. Early signs of a shift in the investment strategy of FIIs are visible now. In the cash market, FIIs have been buyers in eight out of the last thirteen trading days,” he added.
