Why is Sensex rising today? Domestic markets gained more in Monday’s intraday trading as improved global signals and low-level buying pushed indices higher, leading to shortcovering, which in turn aided more buying. In addition, investor attention has also turned to corporate health as the earnings season kicks off today with TCS results.
The BSE Sensex traded 951 points or 1.59 percent higher at 60,851. Nifty50 was trading at 18,131, up 271 points or 1.52 percent at around 11:35 am. Investors, meanwhile, got richer by Rs 3.55 lakh crore amid broad buying as the bulls returned to Dalal Street after a three-day hiatus.
Frontline stocks such as Infosys, Tata Consultancy Services and Reliance Industries contributed to the increase.
As many as 101 stocks hit their 52-week low today. BSE stocks such as Abbott India, IDBI Bank and Jindal Steel and 98 other stocks reached their respective one-year highs. That said, 24 stocks hit their lowest level in a year today.
Here are the factors driving the market:
US job data
US payrolls rose even as wage increases slowed and concerns about the Federal Reserve’s future rate hike decisions eased. The US central bank has repeatedly blamed high wages and job growth on higher inflation and hence its continued aggressive stance.
“Data points released Friday point to a strong but cooling US economy, pointing to the rising possibility of a soft landing for the US economy,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“They point to cooling inflation and the possibility of the Fed becoming less aggressive in 2023. The market has already begun to do this as the dollar index drops below 104 and US 10-year bond yields fall 12 basis points. All signals are bullish.”
One basis point (bp) is one-hundredth of a percentage point.
Global markets
Wall Street’s major indices all rose more than 2 percent on Friday after payrolls rose more than expected in December, even as wage growth slowed and services activity contracted, allaying concerns about the Federal Reserve’s rate hike path.
The Dow Jones Industrial Average rose 700.53 points, or 2.13 percent, to 33,630.61; the S&P 500 gained 86.98 points, or 2.28 percent, at 3,895.08; and the Nasdaq Composite added 264.05 points or 2.56 percent at 10,569.29.
Asian stocks rose Monday as hopes of less aggressive rate hikes in the US and the opening of China’s borders bolstered prospects for the global economy.
Profit season
While the IT sector is expected to experience a slowdown in growth, purchases were made in TCS, Infosys, Tech Mahindra and HCL Tech.
The country’s largest IT services company, TCS, will report its third quarter results later today.
Other IT names, including those from the mid-cap space, also saw buying interest in hopes of a positive surprise.
Any improvement in economic conditions in the US is also positive for IT companies. Therefore, it was concluded that the slowdown in wages and jobs data would also be positive for IT companies, according to some analysts.
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