Domestic benchmark indices Sensex and Nifty were higher on Friday led by index heavyweights; Know the main reasons
Stock market is rising today: Domestic benchmark indices bounced on Friday, with the BSE Sensex surging over 1,800 points and the Nifty50 retracing the 23,800 mark, recovering from a five-month low hit in the previous session. The rally was fueled by strong US labor market data.
Following the surge, the total market capitalization of all listed stocks on BSE stood at Rs. 6.9 lakh crore increased to Rs. 432.25 lakh crores.
Major contributors to the Sensex rally include ICICI Bank, Reliance Industries, SBI, Infosys, ITC and L&T. Other stocks like ITC, TCS, Bharti Airtel and Bajaj Finance also supported the upward momentum.
Buying activity was broad-based, with all major sectors posting gains. The Nifty PSU Bank and Realty indices rose around 3 percent, while the Nifty Bank, Financial Services, FMCG, IT, Metal, Healthcare and Oil & Gas sectors gained 1-2 percent.
IT stocks rise
The Nifty IT index rose nearly 2 percent following positive US labor market data. Initial jobless claims in the US fell by 6,000 to a seasonally adjusted 213,000 in the week ended November 16, the lowest in seven months. This suggests that US job growth is likely to pick up in November after a slowdown due to hurricanes and strikes in October.
A strong US labor market is a positive for Indian IT companies, which derive a significant portion of their revenue from the region.
Investors’ attention is now focused on statements from Federal Reserve officials ahead of the mid-December FOMC meeting. According to CME Group’s FedWatch, the Fed is expected to cut interest rates by 25 basis points in December.
Adani stocks sentiment lift
According to Deepak Jasani, senior VP and head of retail research at HDFC Securities, the market recovery was partly driven by a rally in Adani Group shares after Thursday’s sharp decline. Adani shares fell sharply in New York following news of Gautam Adani’s alleged involvement in a multi-crore bribery and fraud scheme.
By 1:40 PM, shares of Adani Enterprises were up over 3 percent, Adani Green Energy over 0.5 percent, Adani Ports over 3 percent, Ambuja Cements over 4 percent and Adani Power up nearly 4 percent. 0.5 percent.
Heavyweights lead the rally
BSE Sensex heavyweights ICICI Bank, Reliance Industries, SBI and Infosys were the main drivers of the market rally, contributing to the nearly 40 percent gain over the benchmark index.
Among the top movers, SBI rose nearly 5 percent to Rs. 818, while JSW Steel, Ultratech Cement, Bajaj Finance, Adani Ports, Titan, ITC, Larsen & Toubro, HCL Technology, TCS and Bharti Airtel all gained more than 2 percent. percent
Deep buying
With the Nifty index down more than 11 percent from its recent peak, the rally has come even as investors take advantage of recent declines. The mid-cap and small-cap indices also improved by 12 per cent and 9 per cent respectively. As market sentiment changes, investors are taking advantage of the opportunity presented by lower valuations, showing confidence in the segment’s long-term recovery potential.
Technical Bounce
Gaurang Shah, Head Investment Strategist, Geojit noted that the market is trying to find its bottom, with the Nifty looking for support near the 23,300-23,000 level. He mentioned that value buying is visible, but there is no sign of a major correction.
Positive global signs
Global markets also boosted sentiment, with US markets closing higher on Thursday. The Dow Jones gained 1.06 percent, the S&P 500 gained 0.53 percent and the Nasdaq Composite was flat with a positive bias.
Asian markets were mostly positive with Japan’s Nikkei up 0.68 percent. However, Chinese indices such as the CSI 300 and Shanghai Composite fell more than 3 percent and Hong Kong’s Hang Seng fell 2.14 percent. UK’s FTSE 100 also gained 0.79 percent.
Jasani further believes that the negative impact of the Russia-Ukraine war has subsided, citing Ukraine’s first attack against Russia with US-made missiles. The market now expects the situation not to deteriorate further from here.
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