 "Key reasons why Sensex rose 1,100 pts, Nifty climbed 24,490 intraday today")
After a challenging week for investors in Indian bourses, the markets finally turned positive on Monday, surging up to 1,137 points or 1.43 per cent and reclaiming the 80,000 mark at 80,539 levels, while NSE’s Nifty50 soared 312 points or 1.28 per cent at 24,492. levels in intraday deals. However at close, the BSE Sensex ended 602 points higher or 0.76 per cent at 80,005 level, while the NSE's Nifty50 settled at 24,339, rising 158 points or 0.65 per cent.
The key benchmarks were racing on greener pastures on account of strong second quarter results by leading banks and optimism in investors due to expectation of oil prices falling further as Israel's retaliatory strike on Iran over the weekend bypassed Tehran's oil and nuclear infrastructure and did not disrupt energy supplies.
The index heavyweights that pushed the BSE Sensex up on Monday in terms of contribution included ICICI Bank contributing 270 points, the stock was also the top gainer on Sensex, rising 3.68 per cent intraday. Other heavyweights subsumed, Reliance Industries (99 points), ,M&M (88 points), SBI (69 points)and Infosys (63 points).
ICICI Bank received share price target upgrade from brokerages after the private lender posted better-than-industry average results for the July-September quarter (Q2) of financial year 2024-25 (FY25). Read more
Apart from ICICI Bank, M&M, SBI, JSW Steel and IndusInd Bank also surged around 3 per cent each intraday on the BSE Sensex.
Among sectoral trends, all sectors were trading in green, with Nifty PSU Bank outpacing others, surging 3.06 per cent intraday, followed by Nifty Metal (up 2.36 per cent), Nifty Media (1.46 per cent) , Nifty Financial Services (1.13 per cent) and Nifty Auto (1.11 per cent)among others.
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PSU Stocks of PSU banks such as Bank of Baroda, PNB, Canara Bank, SBI, Central Bank, Union Bank, and Bank of India rose in the range of 2-6 per cent each intraday.
Other sectors including NIFTY FMCG, Nifty IT, Nifty Consumer Durables, and Nifty Oil and Gas also shot up to 1 per cent intraday.
In line with benchmarks, the broader markets were also trading in green, with the BSE SmallCap index increasing 0.78 per cent at 52,748.32 level intraday. The BSE MidCap index on the other hand jumping by 0.66 per cent at 45,752.87 intraday
“The trend of flight to quality is likely to sustain given the good numbers from banking majors like HDFC Bank and ICICI Bank where valuations continue to be fair. Investors can profit from these polarised valuations,” said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
Further Vijayakumar said that the global market structure may turn favourable after the subdued Israeli strikes against Iran avoiding the Iranian oil fields which has resulted in a sharp drop in crude prices. The imminent US presidential elections and the uncertainty associated with that will continue to weigh on markets, he added.
Technical View
According to technical analysts, the August low of 23,894 acted as a downside marker for today’s upside attempts. However, they also expect rejection trades to resurface on pull back to 24,350.
Global markets
The positive momentum in Indian equities also came amid a similar show in the Asian markets. Japan’s benchmark Nikkei 225 and Topix index rose on Monday after the ruling Liberal Democratic Party lost its majority in the lower house, securing 215 out of 465 seats in Sunday’s elections. Opposition parties, including the Constitutional Democratic Party and the Democratic Party for the People, made significant gains.
The Nikkei climbed 1.97 per cent, while the Topix increased by 1.58 per cent. South Korea’s Kospi gained 0.97 per cent, and the Kosdaq rose 1.75 per cent. Australia’s S&P/ASX 200 started 0.12 per cent higher.
In the US on Friday, the Nasdaq Composite reached a new all-time high of 18,518.61, rising 0.56 per cent. However, other major indices fell, with the S&P 500 down 0.03 per cent and the Dow Jones Industrial Average declining by 0.61 per cent.