Press "Enter" to skip to content

D-St market cap surges Rs 4.4 lakh cr as Sensex soars 1,000 pts! 6 factors fuelling the rally – Economic Times

NEW DELHI: Domestic stocks saw their market value rising Rs 4.4 lakh crore in Monday’s trade, as investors tracked Friday’s surge in US stocks amid hopes of inflation peaking soon.

The BSE market capitalisation rose to Rs 257.51 lakh crore from Rs 253.13 lakh crore in morning session.

The BSE Sensex climbed over 1,000 points while Nifty50 topped 16,200 in a day every three of four BSE stocks were trading higher.

Here are the factors that pushed the market higher:

Wall Street gains

Wall Street saw strong gains on Friday on solid earnings and favourable economic readings as it snapped a seven-week losing streak. The S&P500 rose 2.5 per cent for the day and settled the week 6.6 per cent, marking its best weekly gain since November 2020. The Dow Jones Industrial Average rose 1.8 per cent while the tech-heavy Nasdaq gained 3.3 per cent on Friday. Most Asian markets were trading higher. Domestic markets danced to the global tune.

Easing US inflation worries

What boosted US stocks was encouraging news about US inflation. The US commerce department on Friday said that inflation rose 6.3 per cent in April from a year earlier, the first slowdown since November 2020 and a sign that high prices may finally be moderating, at least for now.

China reopening

An easing of long-running lockdown measures in Shanghai provided a much-needed lift to sentiment, with China’s biggest city seeing a drop in Covid cases, while some curbs were also being lifted in Beijing, Reuters reported.

Chinese officials have also announced measures to ease the impact on the world’s number two economy, which has been hammered by the restrictions, the Reuters report added.

Buying in heavyweights

Five stocks namely the

duo, IT majors and and alone contributed over 550 points positively to Sensex rise. Bargain hunting and a recent fall in rupee is boosting IT shares that generate a major chunk of their revenues from exports.

“The beaten down IT segment is likely to stage a good comeback assisted by short-covering. Financials, particularly the leading banks, have more room to go up, assisted by delivery based investment buying,” V K Vijayakumar, Chief Investment Strategist at


Rupee strengthening

The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.11 per cent lower at 101.55.

The decline in dollar index and the US 10-year bond yields, too, are positives for risk particularly in emerging markets like India, Vijayakumar said.

At home, the rupee appreciated 12 paise to 77.46 against the greenback in opening trade.

At the interbank foreign exchange, the rupee opened at 77.53 against the American dollar, then gained further ground to quote 77.46, registering a rise of 12 paise from the last close.

Valuation comfort

HSBC in its India Strategy note said India’s PE multiple has now fallen below 5-year mean. It said FII selloff levels and low market breadth would make the case for market rebound. It said it is focused on FMCG, consumer discretionary, IT and telecom sectors and is selective on financials at present.