The benchmark indices on Monday continued to trade higher even as global markets traded mixed after US Federal Reserve Chair Janet Yellen indicated near-certain prospect of an interest rate hike in March barring any sharp deterioration in economic conditions.
At 09:37 am, the S&P BSE Sensex was trading at 29,028, up 196 points, while the broader Nifty50 was ruling at 8,950, up 53 points.
In the broader market, the BSE Midcap and BSE Smallcap indices gained 0.6% and 0.5%, respectively.
"A strong support is seen in the zone of 8,850-8,800 on Nifty; whereas the immediate resistance level is at 8,993. We would reiterate that the trend is strong and hence, one should look to utilise intra-week dips to create fresh longs rather than getting worried about the overbought condition of the market," said brokerage Angel Broking in a technical note.
Buzzing stocks
IT stocks such as Infosys and TCS were the top losers and shed 1% each on the Sensex, while Bharti Airtel gained over 1% to lead the index.
Shares of Dredging Corporation rallied over 16% to hit its 52-week high on news report that the government is looking to sell a 51% stake in the company.
Fed rate hike in March?
Yellen, in a speech on Friday signaled the Fed is set to raise interest rates this month if employment and other economic data hold up. She also said rates are likely to rise faster this year.
US money market futures are pricing in about 90% chance the Fed will raise interest rates by 0.25 percentage point at its meeting on March 14-15, with another rate hike fully priced in by September.
Geopolitical tensions
Risk appetite also took a hit on rising geopolitical tensions in East Asia, as North Korea fired four ballistic missiles early in the day, while a spat between China and South Korea over missile defence deepened.
China cuts growth goal
China has cut its growth target this year as the world's second-largest economy pushes through painful reforms to address a rapid build-up in debt, and erects a "firewall" against financial risks.
China aims to expand its economy by around 6.5% compared to its 2016 goal of 6.5 to 7% when actual growth came in at 6.7%.
Global markets
US stock futures dipped 0.4%, a fairly large move for Asian trade. Japan's Nikkei dropped 0.4%, Seoul shares were down 0.5%, Australia dipped 0.1%, while China's Shanghai Composite and Hong Kong's Hang Seng index bucked the trend to gain 0.3% and 0.2%, respectively.
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