This is why Sensex scaled over 700 pts intraday, BSE SmallCap hit new high

The benchmark indices, Sensex and Nifty started the week with optimism, riding high on the bulls on Monday. The BSE Sensex soared 734 points to 81,820 levels, while NSE’s Nifty50 reclaimed 25,000 mark, surging 0.88 per cent or 220 points to 25,053 at an intraday level.  

The broader markets also showed strength with the BSE MidCap index rising 0.66 per cent at 48,627 levels, while the BSE SmallCap index scaled a new record high at 56,066, jumping 385 points or 0.69 per cent in intraday trade.  

Among the Smallcaps, NIIT stood high on the leaderboard locked in 20 per cent upper circuit after investor Ramesh Damani bought 0.59 per cent stake in the company for Rs 10.02 crore via open market. Apart from NITT, Quick Heal, RPSG Ventures and Panacea Biotech also soared up to 18 per cent intraday. 

 

The bullish show of Indian equities on Monday came amidst positive comments from the US Federal Reserve Chairman, Jerome Powell, who hinted at probable rate cuts in September without delineating its specifics. 

“At the recent Jackson Hole meeting, Fed Chair Jerome Powell hinted at the possibility of interest rate cuts as early as September, expressing confidence that inflation is on a sustainable path toward 2 per cent. As it stands, CME rate probabilities indicate a 100 per cent chance of a rate cut, with a 76 per cent likelihood of a 25 basis point cut in September,” said  Alex Volkov, a market analyst at VT Markets.

Analysts concur Fed chief Powell’s clear message of the beginning of the rate cutting cycle will impart further resilience to the ongoing global rally in stock markets. 

From India’s standpoint, this is a significant development analysts added since it will strengthen the minority view espoused by the two independent members of the MPC in favour of rate cuts in the last monetary policy meeting. 

“Since core inflation in India is only 3 per cent and economic growth is turning slightly sluggish, the MPC is likely to cut rates by 25 bp in the next meeting, The consequent rise in bond prices will be positive for banks, which present a good buying opportunity, since valuations are fair,” said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

On the flip side, worsening of the Israel-Hezbollah tensions may have a negative impact, if the situation worsens further, Dr Vijayakumar added. 

The positive momentum on the Sensex was led by index heavyweights such as HDFC Bank, Reliance Industries, Infosys, and TCS zooming up to 1 per cent each and leading the volumes. 

Among indices, Nifty IT was clearly the fastest runner, soaring 1.77 per cent, with Persistent Systems, Wipro and Mphasis jumping up to 3 per cent in intraday deals. Second in line among indices were Nifty Consumer Durables, Oil and Gas and Financial Services indices.

Meanwhile, Tata Motors and Powergrid were among the top gainers, while Adani Ports and Ultratech Cement were among the laggards on the BSE Sensex.

On NSE, gains were led by the likes of ONGC, Wipro, Hindalco and LTIMindree soaring between 1-2 per cent each at intraday levels. Meanwhile Apollo Hospitals, HDFC Life and Adani enterprises were down up to 1 per cent.

At 11:30 AM; the BSE Sensex was trading 0.72 per cent higher at 81,668 levels, while the NSE was up by 0.68 per cent at 24,991 levels.