After witnessing deep cuts in the previous two sessions, Indian equity benchmarks the Sensex and the Nifty vaulted with gains of over a percent each in intraday trade on July 22 in light of positive global cues.
Sensex jumped more than 600 points while Nifty reclaimed 15,800 on buying across sectors.
At 1315 hours, Sensex was 580 points, or 1.11 percent, higher at 52,778 while the Nifty was at 15,802, up 170 points or 1.08 percent.
Mid and smallcaps, too, clocked healthy gains. BSE Midcap and smallcap indices were up 0.80 and 1.44 percent, respectively, at that time.
Most sectoral indices were in the green, with BSE Metal and realty jumping up to 3 percent. BSE Bankex, finance, IT, consumer durables and capital goods rose up to 2 percent.
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Here are 4 factors that may have boosted the market:
1. Positive global cues: Wall Street stocks posted their second-straight daily gain on Wednesday, with robust corporate earnings and renewed optimism about the US economic recovery fueling a risk-on rally.
The Dow Jones Industrial Average rose 286.01 points, or 0.83 percent, to 34,798, the S&P 500 gained 35.63 points, or 0.82 percent, to 4,358.69 and the Nasdaq Composite added 133.0 percent points, or 0.92 percent, to 14,631.95.
Among the Asian peers, Hong Kong’s Hang Seng and Korea’s KOSPI rose by a percent while Japan’s Nikkei and China’s Shanghai Composite Index rose half a percent.
2. Buying on dips: After two days of healthy correction, the valuation of the market has cooled off to some extent and market participants are using this opportunity to add stock to their portfolio, said experts.
Besides, quarterly numbers are showing there are opportunities in select areas.
“Results declared recently show pressure in financials like banks, insurance firms and NBFCs like Bajaj Finance. But these pressures are likely to be short-lived. Asian Paints’ excellent numbers indicate that there are pockets of business coming out with flying colours in these pandemic times,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
3. Crude oil drops, rupee rises: Indian rupee opened 18 paise higher at 74.43 per dollar against the previous session’s close of 74.61.
The safe-harbour US dollar and yen remained on the back foot on Thursday, after pulling back from multi-month highs amid a recovery in risk appetite as strong earnings lifted Wall Street stocks.
Oil prices slipped on July 22 after an unexpected rise in US crude oil inventories and as rising COVID-19 infections threaten demand, but prices held on to most of their gains from the previous session on expectations that supplies will remain tight through year-end.
4. Technical factor: Nifty is taking support at the 15,600 level and only a decisive break of this level will trigger a further correction, said experts.
“In the previous session, the index took good support at 15,600 and has bounced from there. 15,800-15,900 is an area of resistance. If we can get past that, the markets should resume their endeavor to scale higher towards 16,000-16,100. Until then we continue to be in a sideways patch with 15,600 at the lower end and 15,900 at the upper end,” said Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments.
(With inputs from Reuters and other agencies.)
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