Stock market today: Nifty 50, Sensex jump by 1% each; investors earn over ₹4 lakh crore in a day

Stock market today: A fresh wave of across-the-board buying engulfed the Indian stock market on Friday, August 9, causing the benchmarks, the Sensex and the Nifty 50, to end the day over a per cent higher each.

Sensex closed 820 points, or 1.04 per cent, higher at 79,705.91, while the Nifty 50 ended with a gain of 251 points, or 1.04 per cent, at 24,367.50.

In the Nifty 50 index, only four stocks - HDFC Life (down 1.09 per cent), Kotak Mahindra Bank (down 0.16 per cent), Maruti (down 0.12 per cent) and Sun Pharma (down 0.10 per cent)- ended in the red, while one stock- Divi's Labs- ended flat.

On the other hand, shares of Eicher Motors (up 5.68 per cent), Mahindra and Mahindra (up 3.05 per cent) and Shriram Finance (up 2.88 per cent) closed as the top gainers in the index.

The domestic market mirrored positive global sentiment after US jobless claims came below forecasts, soothing fears of an economic slowdown in the US. Labor Department data on Thursday showed that first-time jobless benefits claims stood at 2,33,000 last week, down 17,000 from the previous week. It was also below the Dow Jones estimate of 2,40,000.

After the report, the Nasdaq jumped nearly 3 per cent, while the S&P 500 rose 2.30 per cent on Thursday. Major European markets, including the FTSE, CAC 40 and DAX, rose up to a per cent during the session on Friday.

The domestic market witnessed gains in all segments as the BSE Midcap index rose 1.21 per cent, while the Smallcap index moved up by 0.79 per cent.

The overall market capitalisation of BSE-listed firms rose to nearly ₹450 lakh crore from nearly ₹445.8 lakh crore in the previous session, making investors richer by over ₹4 lakh crore in a day.

“Strong global market cues provided a major impetus to local shares as Sensex surged more than 1,000 points in intra-day trades on all-round buying support. Despite volatility in foreign fund flows this year, capital infusion by domestic institutions have been robust over the past year or so, giving local markets a major succour in times of volatile phase," said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Nearly 250 stocks, including Colgate Palmolive (India), Lupin, PI Industries, Trent and United Spirits, hit their fresh 52-week highs in intraday trade on BSE.

The volatility index India VIX dropped over 7 per cent.

All major sectoral indices ended with gains, with Nifty PSU Bank (up 1.92 per cent), Media (up 1.83 per cent), Auto (up 1.72 per cent), IT (up 1.55 per cent), Realty (up 1.55 per cent) and Oil & Gas (up 1.33 per cent) closing with solid gains.

"Positive US jobless claims data eased the fears of recession and provided a favourable broader market reaction. The IT index outperformed in expectation of improved spending. Though the sentiment is gaining traction, a lack of fresh triggers and subdued earnings will be a deterrent to higher valuation. To safeguard the sentiment, investors are advised to shift their focus from growth stocks to value stocks," said Vinod Nair, Head of Research, Geojit Financial Services.

On a weekly scale, Nifty 50 extended its losing run into the second consecutive week, falling 1.4 per cent for the week ended August 9. The Sensex declined 1.6 per cent for the week. BSE Midcap index slipped by a per cent, while the Smallcap index fell nearly 2 per cent.

On the technical front, Amol Athawale, VP of technical Research at Kotak Securities, believes the larger texture of the market is still on the weak side. However, Athawale said as long as the Nifty 50 is above 24,200, the pullback formation is likely to continue up to the 20-day SMA (simple moving average) or 24,525.

According to Athawale, a further upside may also continue, which could lift the market to 24,625. However, the dismissal of 24,200 could accelerate the selling pressure.

"Below 24,200, the Nifty 50 could slip to 24,000 or a 50-day SMA (simple moving average) and 23,850," said Athawale.

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