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Sensex jumps 800 points, Nifty above 11,000: Top factors behind market rally – Economic Times

NEW DELHI: A low-level buying on Friday supported by positive global cues helped domestic equity indices recoup over half of the losses sustained in the previous session even as the risks and worries over Covid-19 and economy remained.

The 30-share pack Sensex jumped 793 points or 2.16 per cent at 37,346. The 50-share NSE Nifty rose in tandem and was up 227 points or 2.10 per cent at 11,033. If benchmark indices manage to hold the gains till closing then they will snap six-day losing run but both are poised to report big weekly losses.

The level of volatility also declined as trading of October series contracts began. India VIX was down 9.28 per cent to 21.32.

Among bluechips, HCL Tech was the biggest gainer, up 5.42 per cent followed by Bharti Airtel, Cipla, IndusInd Bank, TCS, Adani Ports, Bajaj Finance and Eicher Motors that added 3-5 per cent. SBI Life Insurance, BPCL and Kotak Mahindra Bank were among a few names that witnessed selling pressure.

Broader market indices also rebounded with Nifty Smallcap advancing 1.84 per cent and Nifty Midcap climbing 1.60 per cent. Among sectoral indices, Nifty IT and Nifty Pharma were top gainers.

Here are the key factors driving markets:

  • Firm global cues

The overnight rally in the US tech stocks boosted sentiments back home and helped bring buyers back into the market. Meanwhile, a recovery in Asian markets also proved to be constructive.

Shares on Wall Street ended positive in choppy trade on Thursday, led by a dogged comeback in the technology sector, having initially sold off on higher-than-expected unemployment claims. The Dow Jones Industrial Average rose 0.2 per cent, the S&P 500 gained 0.30 per cent and the Nasdaq Composite added 0.37 per cent.

  • Low-level buying

After 2,750-point fall in Sensex, and even more in broader markets, valuation of some of the stocks has come down sharply, which attracted buyers back on the Street.

Few analysts also said the market fall has presented investors to accumulate quality names. Gurmeet Chadha, Co-Founder & CEO, Complete Circle Consultants said investors should keep accumulating quality stocks with decline but warned that one should not simply buy just because you have seen a 2,000-point correction in one week.

  • US stimulus coming?

Investors also took relief from the news that Democrats in the US House of Representatives are working on a $2.2 trillion coronavirus package that could be voted on next week. If that attempt to pass the bill is successful, it can give a massive boost to the economy and the world markets.

In the interim, Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin highlighted as much as $380 billion from the US Congress’ last big coronavirus aid package is unused and could help households and businesses if lawmakers approve.