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Stock market updates on March 21: Equity investors turned richer by Rs 6 trillion on Thursday with markets sprinting amid positive global mood. The market capitalisation of all the BSE listed firms touched Rs 380 trillion today.
The S&P BSE Sensex jumped 781 points intraday to hit a high of 72,882 level, while the Nifty50 reclaimed the 22,000-mark to hit a high of 22,081 level during the day. It notched an intraday rally of 242 points. TRACK UPDATES
The S&P BSE Sensex, eventually, settled 540 points, or 0.75 per cent, higher at 72,641 levels, while the Nifty50 shut shop above 22,000-mark at 22,012, up 173 points or 0.79 per cent.
In the broader markets, the rebound was steeper with the BSE MidCap and SmallCap indices closing 2.3 per cent and 2 per cent higher, respectively.
Here are the key reasons why the markets are rallying today, March 21:
US Federal Reserve's dovish policy: Investors were relieved overngiht after the US Federal Reserve held interest rates steady at 5.25-5.5 per cent, indicating that they still expect to reduce them by three-quarters of a percentage point by the end of 2024.
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Despite describing inflation as "elevated", 10 of the Fed's 19 officials see the policy rate falling by the end of this year, a median view first set in December. They, however, see less rate cuts in 2025.
"The uncertainty regarding the US Fed decision is over with the Fed keeping the rates unchanged, and refraining from a hawkish message. The Fed chief's statement that 'inflation has eased substantially while the labour market has remained strong' conveys conviction about the soft landing of the US economy. This favourable global construct will have its positive impact on thr Indian markets ," said V K Vijayakumar, chief investment strategist, Geojit Financial Services.
Relief rally in global markets: Wall Street's main stock indices rose in Wednesday, with the Dow Jones Industrial Average and the S&P500 closing at record highs after the Federal Reserve eased investor jitters.
The S&P 500 closed up 0.89 per cent, while the Nasdaq Composite surged 1.25 per cent. The Dow Jones Industrial Average jumped 1.03 per cent to 39,512 points, and was within spitting distance of the psychologically important 40,000 level.
Closer home, Japan's Nikkei hit fresh lifetime high of 40,812 levels, surging over 2 per cent intraday today.
Hang Seng, and Kospi, too, advanced 1.7 per cent and 2.3 per cent, respectively, while ASX 200 added 1.5 per cent.
Heavyweights upbeat: Key heavyweight stocks on the benchmarks, including HDFC Bank, L&T, Reliance Industries, NTPC, SBI, Tata Steel, and Tata Motors were ruling higher in the range of 0.8 per cent to 3.23 per cent.
These stocks accounted for 51 per cent of the gains on the 30-stock Sensex index.
Technical factor: The Nifty50 recouped initial losses and reclaimed 21,900-mark on Wednesday, forming a Doji like candle on the daily chart. Thus, sustenance and a decisive close above previous session's high would confirm pause in downward momentum and open the door for a meaningful pullback towards 22,200, as per analysts.
In the process, ICICI Direct said 21,700 would continue to act key support as it is 61.8 per cent retracement of January-March upmove (21,137-22,526), placed at 21,667.
"Structurally, we believe, the ongoing consolidation would set the stage for next leg of up move. In the process, we expect large caps to relatively outperform the broader market. Thus, buying on dips would be the prudent strategy to adopt. Meanwhile, we expect Nifty midcap and small cap indices to undergo base formation over few weeks," the report said.
