Sensex rallies over 150 points, Nifty above 7,900 level in early trade

The Sensex rallied over 150 points and the Nifty traded above 7,900 level, up 30 point in early morning trade on Tuesday.

The Indian rupee opened marginally higher by three paise at 68.13/$ against the previous close of 68.16/$.

Asian markets excluding Japan all traded in the green as an earthquake in Japan & threats of a Tsunami break out kept the Japanese index flat to marginally negative. This after oil hit a new 4 week high along with the Dow Jones, Nasdaq & the S&P index rising in tandem.

The risk on trade is back in action as globally bullishness resurfaces with Japan & the US indices in new bull markets.

Nifty continues to see foreign selling dominate proceedings with fear being the dominant theme. The perception of sharp slowdown in the economy on the back of demonetisation is leading to short term pain with ETF selling exaggerating the visible fall out.

For today, expect bounce back from extremely oversold zone as PCR (put call ratio) trading @ 0.7 indicates pessimism at a high with call writing overdone. Banks, energy & IT should lead the pullback with FMCG & Infra being laggards for today.  

On the economy front, the Central bank gave lenders an additional 60 days’ time to reclassify a loan in default as bad on their books and start setting aside money to cover it. This is over and above the 90-day period, according to existing guidelines.