Sensex surges 650 points, Nifty regains 18000, rupee surges vs USD. Key factors that drove the rally
Sensex, Nifty and the broader markets displayed strong momentum on expectations of a healthy start to the earnings season, say analysts
PremiumIndian stock markets finished on a strong note today with Nifty50 index regaining the key 18,000 levels after a gap of nearly two months. The BSE Sensex ended 650 higher at 60,395.63, while the broader NSE Nifty jumped 1.07% to 18,003.30. Meanwhile, Indian rupee today surged 31 paise to close at 74.03 against the US dollar amid robust buying in domestic equities. In the previous session, the rupee had settled at 74.34 against the US dollar.
Foreign institutional investors were net buyers in the capital market on Friday, as they purchased shares worth ₹496.27 crore, as per stock exchange data.
Amid weak global markets and rising covid cases, the domestic market displayed strong momentum on expectations of a healthy start to the earnings season, said Vinod Nair, Head of Research at Geojit Financial Services.
"PSU Banks led the sectorial rally as reports suggested an increase in FPI limits while the realty sector followed the trend on robust sales numbers and expectations of support measures in the upcoming budget. Globally, bourses were muted as reports of record-high Eurozone inflation at 5% kept investors on edge while awaiting the release of the US inflation data later this week which is expected to remain elevated," he added.
Banks led the rally on expectations of better loan growth with provisional numbers pointing towards an improved third quarter performance, said S Ranganathan, Head of Research at LKP Securities. Auto stocks rebounded strongly as did the small and midcap Indices with advance-Decline ratio showing a healthy trend.
The Nifty Bank index surged 1.6% while Nifty auto index today jumped 1.8%.
On the Sensex chart, Titan, Maruti, SBI, L&T, HDFC and Kotak Bank emerged as prominent gainers. In contrast, Wipro, Nestle India, Asian Paints and PowerGrid were among the major laggards.
Tata Consultancy Services rose more than 3% after the software heavyweight said it plans to consider a share buyback.
The market expects Q3 results starting this week to be very good, particularly for IT and financials, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“The Nifty has been successful in closing above the 17950 level - this should allow the index to scale up further to levels closer to 18300-18400. The overall mood of the market seems jubilant and hence intra day corrections can be looked at buying opportunities. As long as 17700 holds on a closing basis, the trend is positive," said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. (With Agency Inputs)
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