Home / Markets / Stock Markets /  Why Sensex rose nearly 1,300 points today? Key triggers to know

Indian stocks markets rebounded strongly today, led by gains in banking stocks. A attempted bounce in global equities and upbeat quarterly updates from banks also lifted sentiment ahead of the corporate earnings season. The NSE Nifty 50 index rose 2% while Sensex jumped nearly 1,300 points to reclaim 58,000 levels. Wall Street rallied overnight while Asian stocks were mostly higher after Britain scrapped bits of a controversial tax cut plan, helping improve global market sentiment, cooling US bond yields and rallying the pound.

IndusInd Bank shares rose 5.5% after it said second-quarter net advances rose 18% year on year. Shares of Mahindra and Mahindra Financial Services surged 12% after the company reported strong disbursement for September and improved collection efficiency. 

On Monday, Wall Street soared to its best day in months in a widespread relief rally after some unexpectedly weak data on the economy raised the possibility that the Federal Reserve won't have to be so aggressive about hiking interest rates. A report on US manufacturing came in weaker than expected, along with data showing a drop off in construction spending from July to August. The Dow Jones Industrial Average rebounded 2.7% though the index is still down nearly 23 per cent for the year.

“The ‘risk-off, risk-on’ texture of the market is in response to fast changing economic and market signals. For the near-term the market sentiments have turned positive with declining trend in dollar and US bond yields. If this trend continues FIIs will again turn big buyers in India and they will not get stocks cheap," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"Financials and autos are again set to lead the uptrend since their fundamentals and prospects are strong. Capital goods are likely to join the rally and telecom is on strong wicket," he added. 

“In the last eight out of ten years Sensex has given positive returns in October. Also, markets have a record of troughing out in October. This may happen this October too," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities, says: “The short term trend of Nifty has turned up sharply after a broader range movement of the last few sessions. A decisive move above 17300 levels is likely to pull Nifty towards the next crucial resistances of around 17600 and next 18000 levels in the near term. Immediate support is placed at 17150 levels."

Shares of Mahindra and Mahindra Financial Services surged 12% after the company reported strong loan disbursement and improved collection efficiency in September.

On Monday, foreign investors turned net buyers after a gap of eight days of being net sellers. The foreign portfolio investors bought equities worth 590.58, according to National Stock Exchange data. Domestic institutional investors sold equities worth 423 crore after nine-day net buying.

In a note, Axis Securities said that a hawkish US Fed, a stronger dollar could keep Indian markets volatile in near term. “In the same context, FII flows may be volatile in the near term and the market may see an increase in volatility if pressure on the rupee continues. However, over the medium to long term, the Indian equity market is likely to outperform the global market on account of its robust economic outlook," the brokerage said. 

 (With Agency Inputs)

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