Indian markets took a breather after a huge sell-off on Monday

Indian markets took a breather after a huge sell-off on Monday

India’s benchmark Sensex and Nifty50 opened positive on Tuesday, trailing other Asian markets and taking a break from the sell-off a day earlier.

Despite the upbeat opening, markets are expected to remain volatile throughout the week amid fears of a global recession and continued inflation and ahead of the RBI’s policy announcement on September 30.

The RBI is also widely expected to follow the Fed’s lead and raise interest rates on Friday. The RBI has already raised interest rates three times in a row by a total of 140 basis points.

The Sensex opened 0.74%, or 440 points, higher at 57,579, while the Nifty50 gained 0.72%, or 125 points, to 17,142.

โ€œMarkets are likely to take a breather from recent corrections and start Tuesday’s session on a higher note, watching the SGX Nifty and select Asian indices rally, even as US markets continued their downtrend in intra-day trade. However, markets may continue to fluctuate during the day amid escalating risks of a global recession, driven in large part by aggressive monetary tightening around the world to curb rising inflation. Also, recession warnings in the US are getting louder as the 10-year US bond yield is trading at an 11-year high and the 2-year at a 15-year high,โ€ said Prashanth Tapse, senior research analyst. VP (Research) at Mehta Equities.

On Tuesday, the rupee was trading at 81.37 against the dollar in morning trade. A day earlier, the rupee touched a fresh low of 81.73 amid tightening monetary policy by central banks around the world and concerns over India’s record trade deficit.

โ€œThe Indian economy is in a much better shape than others in terms of growth prospects over the next 12 months. High frequency indicators are also stable. However, we could see further cuts in the Indian market in the coming days given the hawkishness of global central banks and the weakening currency. A sell-off in the pound, unrelenting rise in the dollar index, a weakening rupee and the looming RBI meeting in the second half of this week should keep markets on edge,โ€ said Vineet Bagri, managing partner, TrustPlutus Wealth.

All sectoral indices are trading in the green today with Nifty IT, FMCG and Banks stealing the limelight with big gains.

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