Why is Stock Market Rising Today? Bulls got here raging on the D-Street as indices reversed gear to submit a rebound on October 4, buoyed by upbeat quarterly updates by India Inc and heavy shopping for within the US and Asian markets. The declining greenback and US bond yield additionally lifted sentiment. Sensex rallied over 1,100 factors and Nifty was positioned above the 17,100 mark.
The market has been fairly unstable within the final one week on world cues however now that the company earnings season is about to start analysts predict the sentiment to enhance. Since 2011, there have been solely two events when Sensex has given destructive returns within the festive month of October, which additionally marks the start of Q3 and the second half of the monetary 12 months.
“We expect (the Nifty50) index to sustain above the psychological mark of 17,000,” stated analysts at ICICI Securities.
Market breadth favoured gainers. In the Nifty 50, 48 shares gained led by IndusInd Bank, Bajaj Finance, Hindalco Industries, and TCS. The solely two losers had been PowerGrid and Dr Reddy’s Labs.
VK Vijayakumar, chief funding strategist at Geojit Financial Services, stated the risk-off, risk-on texture of the market is in response to fast-changing financial and market alerts.
“For the near term, market sentiments have turned positive with a declining trend in dollar and US bond yields,” he stated. “If this trend continues, foreign institutional investors (FIIs) will again turn big buyers in India and they will not get stocks cheap. 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 a strong wicket.”
September Quarter Earnings
Ahead of the September quarter earnings season, encouraging quarterly updates from corporations lifted sentiment. Companies from varied sectors reported steady development that led to market-wide shopping for.
IndusInd Bank shares rose 5.7 per cent after it stated second-quarter web advances rose 18 per cent 12 months on 12 months. Shares of Mahindra and Mahindra Financial Services surged 10 per cent after the corporate reported robust disbursement for September and improved assortment effectivity.
FII Buying
After being web sellers to the tune of over Rs 7,000 crore in September, overseas institutional buyers or FIIs purchased Indian equities value Rs 590 crore on the primary buying and selling day of Q3 i.e. yesterday.
“If this trend continues, FIIs will again turn big buyers in India and they will not get stocks cheap. 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 a strong wicket,” stated Dr V Ok Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Global Cues
The Dow Jones closed up 2.66 per cent on Monday in its greatest one-day advance in over 3 months as buyers factored within the risk that the US Fed could be pressured to again away from aggressively tighter financial coverage.
Other Asian markets had been additionally in a festive temper as Japan’s Nikkei jumped on Tuesday to its highest in almost two weeks. Markets in mainland China and Hong Kong are closed for a vacation.
Dollar, Yields Soften
The Dollar Index, which pits the US forex in opposition to the euro and 4 different rivals, hit a greater than per week low of 111.40, shedding some 2.2 per cent over a four-day span.
Meanwhile, the yield on the US 10-year Treasury observe tumbled to a September 22 low of three.587 per cent, making riskier belongings like rising market equities enticing.
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