Why is Sensex Rising today? Domestic markets extended gains in Monday’s intra-day trade, as improved global cues and low-level buying pushed indices higher, which led to short covering, which, in turn, aided more buying. Furthermore, investor focus also turned to corporate health as earnings season kicks off today with TCS results.
The BSE Sensex was trading 951 points or 1.59 per cent higher at 60,851. Nifty50 was trading at 18,131, up 271 points or 1.52 per cent at around 11.35 am. Investors, meanwhile, turned richer by Rs 3.55 lakh crore amid broad-based buying as bulls returned to Dalal Street after three-day hiatus.
Frontline stocks such as Infosys, Tata Consultancy Services and Reliance Industries contributed to the climb.
As many as 101 stocks hit their 52-week lows today. BSE stocks such as Abbott India, IDBI Bank and Jindal Steel and 98 other stocks hit their respective one-year high levels. That said, 24 stocks touched their one-year low levels today.
Here are the factors driving the market:
US Job Data
US payrolls expanded even as wage increases slowed and eased worries about the Federal Reserve’s future interest rate hike decisions. The US central bank has repeatedly blamed high wages and job growth for the higher inflation and hence its continued hawkish stance.
“Data points released on Friday points to a strong but cooling US economy, which indicates the rising possibility of a soft landing for the US economy,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
“They point to cooling inflation and the possibility of the Fed going less hawkish in 2023. The market has already started discounting this with the dollar index declining below 104 and the US 10-year bond yield declining by 12 bps. All signals are bullish.”
One basis point (bp) is one-hundredth of a percentage point.
Global Markets
Wall Street’s main indexes all gained more than 2 per cent on Friday after December payrolls expanded more than expected even as wage increases slowed and services activity contracted, easing worries about the Federal Reserve’s interest rate hiking path.
The Dow Jones Industrial Average rose 700.53 points, or 2.13 per cent, to 33,630.61; the S&P 500 gained 86.98 points, or 2.28 per cent, at 3,895.08; and the Nasdaq Composite added 264.05 points, or 2.56 per cent, at 10,569.29.
Asian shares rallied on Monday as hopes for less aggressive US rate hikes and the opening of China’s borders bolstered the outlook for the global economy.
Earnings Season
Even as expectations are that the IT sector will see a slowdown in growth, buying was seen in TCS, Infosys, Tech Mahindra and HCL Tech.
The country’s biggest IT services company TCS will share its third-quarter results later in the day.
Other IT names, including those from midcap space, also saw buying interest on hopes of a positive surprise.
Any improvement in economic conditions in the US is also positive for IT companies. Hence, slowdown in wage and jobs data was inferred to be positive for IT companies as well, some analysts said.
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