Sensex News: Sensex jumps 1,600 points: key factors behind the stock market rally
The market capitalization of all BSE-listed companies jumped from Rs 5.73 lakh crore to Rs 280.35 lakh crore from Rs 274.56 lakh crore on Monday, as Sensex climbed more than 1,600 points and Nifty50 broke above the 17,700 level.
Here are the factors that contributed the most to the rise of the market:
- Strong purchase of bank stocks
While Tuesday’s rise in key indices was broad-based, a few BFSI stocks, namely Bank, ICICI Bank, Bajaj Finance, HDFC, contributed positively more than 250 points to the upside of the index. Other BFSI stocks also rose. was trading up 3.98% at Rs 16,730. , and SBI gained 3% each and were among the top five gainers in the index. , , and rose up to 1.6 percent. After a sharp drop in US stocks over the past two sessions, S&P500 futures were trading slightly higher, suggesting a flat start to a positive start for US stocks later in the day. In his Friday speech, Powell sent a short and direct message that there won’t be a Fed pivot any time soon, which positions markets for further weakness in equities, analysts said.
“Investors expected that once the US got some ugly data, maybe some negative NFP reports, the Fed would come to the rescue, but that may not be the case” , said Edward Moya, principal market analyst, The Americas OANDA. A rally in S&P500 futures suggests the market is pricing in development.
Oil prices fell on Tuesday, paring some gains from the previous session as the market feared more aggressive interest rate hikes from central banks could lead to a global economic slowdown and lower demand for oil. fuel, Reuters reported.
Brent crude futures for October settlement fell 56 cents, or 0.5%, to $104.53 a barrel, after climbing 4.1% on Monday, the biggest gain in more than ‘a month. The October contract expires on Wednesday and the more active November contract was at $102.57, down 0.4%.
The dollar index, which tracks the greenback against a basket of six major global currencies, was hovering near 108.70 after hitting a 20-year high in the previous session on the strength of the euro. The dollar and stocks share an inverse relationship.
The Indian rupee was trading higher against the dollar, helped by inflows from foreign equities and a decline in the dollar index. The national currency stood at 79.81 to the dollar, after closing at 79.9625 in the previous session. Foreign investors poured around $6 billion into Indian stocks this month, the biggest inflow since December 2020.
Nifty50 had a range of 17,350-17,400 as its immediate resistance zone, which it easily broke through in Tuesday’s trade.
The index has rallied and is flirting with its 20-day SMA, which stood at 17,549 on Monday. The 20-day SMA had offered some support to the index during the recent drop, but the level had been exceeded during the fall of the day before. Exceeding this level at the close can reassure investors. “Unless Nifty50 closes above 17,550, all pullback attempts will remain vulnerable to a sell off,” Chartviewindia.in’s Mazhar Mohammad said yesterday.
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