Indian shares were trading higher on January 9 after three days of incessant selling as improved global cues and low-level buying pushed indices higher, which led to short covering, which, in turn, aided more buying.
At 11.20 am, the 30-pack Sensex was up 856.29 points, or 1.43 percent, at 60,756.66 and the broad-based Nifty was trading 244.55 points, or 1.37 percent, higher at 18,104.
IT sector was the star of the day as the earnings season kicks off, with almost all counters seeing buying interest. Among 30 constituent stocks of the Sensex, Titan was the only loser, down about 2 percent.
Here are the factors propelling the market:
Positive data
Investors cheered a crucial US jobs report that showed wage growth slowed in December, fuelling bets that inflation is easing and the Federal Reserve need not be as aggressive as some feared.
The US central bank has repeatedly blamed high wages and job growth for the higher inflation and hence its continued hawkish stance.
“Data points released on Friday points to a strong but cooling US economy, which indicates the rising possibility of a soft landing for the US economy,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“They point to cooling inflation and the possibility of the Fed going less hawkish in 2023. The market has already started discounting this with the dollar index declining below 104 and the US 10-year bond yield declining by 12 bps. All signals are bullish.”
One basis point (bp) is one-hundredth of a percentage point.
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Global markets
The US market zoomed following the release of the data, which was reflected in Asian markets, spreading positive sentiments to Dalal Street as well.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, with South Korean shares gaining 1.1 percent. Japan’s Nikkei was closed for a holiday but futures were trading at 26,235, up from a cash close of 25,973 on January 6. S&P 500 futures added 0.2 percent and Nasdaq futures 0.3 percent.
Earnings season
Even as expectations are that the IT sector will see a slowdown in growth, buying was seen in TCS, Infosys, Tech Mahindra and HCL Tech.
The country’s biggest IT services company TCS will share its third-quarter results later in the day.
Other IT names, including those from midcap space, also saw buying interest on hopes of a positive surprise.
Any improvement in economic conditions in the US is also positive for IT companies. Hence, slowdown in wage and jobs data was inferred to be positive for IT companies as well, some analysts said.
Q3 updates
Business updates for several companies also trickled in, which has also lifted sentiments for some sectors. For instance, real estate companies continue to report growth numbers. Numbers for some companies have been not encouraging.
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