Back on D-Street, the bulls must have said Thank God its Friday as Indian markets recouped most of the losses of the previous session on September 25.
The S&P BSE Sensex closed 835 points higher at 37,388 while the Nifty50 gained 244 points to end at 11,050.
Sectorally, the action was seen in telecom, IT, auto and capital goods space.
On the broader markets front, the S&P BSE midcap index was up 2.9 percent while the smallcap index rallied 2.3 percent.
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Top Nifty gainers included Bharti Airtel, Cipla, HCL Tech and Bajaj Finserv.
Top Nifty losers included BPCL, UPL and SBI Life Insurance Company.
Here are four factors that likely helped the markets:
Stable Rating
The global rating agency, S&P affirms India’s ‘BBB-/A-3’ rating with a stable outlook. India’s outlook remains stable as the economy is expected to recover post-COVID.
The global rating agency expects India’s real GDP growth to recover from fiscal 2021 onwards.
Stimulus hopes
The Modi government is just weeks away from announcing another round of stimulus measures aimed at creating jobs and pushing demand, as it looks to turn around India’s ailing economy that saw its steepest ever contraction in April-June.
These plans could involve a bigger direct fiscal outlay compared to the previous two packages—the PM Garib Kalyan package and the Aatmanirbhar Bharat package—and may include a Rs 35,000-crore urban jobs scheme, a massive infrastructure initiative with an emphasis on 20-25 big projects that can be completed this year and continuing focus on rural job and farm schemes and free food and cash transfers.
Also Read: Exclusive | Government set to announce fiscal stimulus package ahead of festive season
Stable global cues
Indian markets woke up to strong global cues that cemented hopes of some green on the screen. Asian markets closed mostly higher while the Dow Jones Industrial Average rose 0.2 percent, the S&P 500 gained 0.30 percent and the Nasdaq Composite added 0.37 percent.
“There had been a flicker of hope overnight after squabbling US political parties rekindled talk of another super-sized stimulus package but the rise in the dollar and demand for safe US and German government bonds remained,” Reuters said in a report.
“Stimulus measures, if any, in the US could provide support to the markets. If the market corrects from these levels, then investors should actively look for accumulating good quality stocks for long-term wealth creation,” Sanjeev Zarbade, VP PCG Research, Kotak Securities told Moneycontrol.
Short covering
The Nifty50 started the October series on a strong note by rallying more than 2 percent but experts still advise caution. The index closed above the crucial resistance level of 10,900, which triggered short-covering that helped the index to climb 11K.
The rally was largely on the back of stimulus news but can we say that the short-term bear trend is reversed? Maybe not.
“While the markets spent some time above the psychological level of 11000, the weakness in the index continues. The resistance on the upside is at 11,300,” Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments told Moneycontrol.
“Until that is not crossed, we cannot surmise that the short-term bear trend has been completed and an upside rally will ensue. On the downside, the Nifty can fall to the 10,750 level,” he said.
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