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The Indian stock market registered sharp gains on Wednesday due to strong cues from US counterparts and strong domestic market fundamentals. Benchmark Sensex and Nifty registered gains of more than one percent. The 30-share BSE Sensex closed at 85,609.51, up 1022.50 points or 1.21 per cent. During trading, it rose by 1,057.18 points or 1.24 percent to 85,644.19 points. Whereas the 50-share Nifty closed at 26,205.30, up 320.50 points or 1.24 percent. It was only 10 points shy of its all-time high. Experts said growing optimism over a possible ceasefire between Russia and Ukraine also boosted investor sentiment.
Condition of Sensex companies
Among Sensex companies, Bajaj Finserv, Bajaj Finance, Tata Steel, Reliance Industries, Sun Pharma, Tata Motors Passenger Vehicles, Axis Bank and Infosys were the major gainers. Bharti Airtel and Asian Paints were among the laggards. Market participation was broad, with metals, energy and IT leading the gains. Mid-cap and small-cap indices also rose more than 1 percent.
There was a rise in European markets
In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index and Hong Kong’s Hang Seng index closed in positive territory. The Kospi rose 2.67 percent, the Nikkei 225 index rose 1.85 percent and the Hang Seng index rose 0.13 percent. However, Shanghai’s SSE Composite index closed down. European markets were trading in the green. American markets closed with gains on Tuesday.
Expectations of Federal Reserve cutting interest rates increased
Ponmudi R, CEO of online trading and wealth tech firm Enrich Money, said Indian markets witnessed an impressive rally on Wednesday with broad-based buying across sectors, reflecting intensified risk-off sentiment in global equities. He said the rally was supported by rising expectations of a US Federal Reserve cut in interest rates in December, as the latest US economic data, including September retail sales and producer price data, indicated softening demand and a decline in inflation.
Market sentiment improved due to weakening of dollar
Vinod Nair, Head of Research, Geojit Investments Ltd., said that globally, rising expectations of interest rate cut by the US Federal Reserve in December, along with easing of interest rates in the US and weakening of the dollar have improved market sentiment. “In addition, growing optimism regarding a possible ceasefire between Russia and Ukraine is increasing risk appetite, boosting the positive outlook for the year ahead.”
Reserve Bank can cut interest rates
Ajit Mishra, senior vice-president (research), Religare Broking Ltd, said investor sentiment improved on renewed optimism over a possible interest rate cut by the US Federal Reserve in December as well as expectations of a 25 basis points repo rate cut by the Reserve Bank of India early next month. Additionally, falling crude oil prices were also supported by hopes of progress towards peace between Ukraine and Russia.
Brent crude price increased to $ 62.50 per barrel
The price of global oil standard Brent crude rose marginally by 0.03 percent to $ 62.50 per barrel. According to exchange data, foreign institutional investors bought shares worth Rs 785.32 crore on Tuesday and domestic institutional investors (DIIs) also bought shares worth Rs 3,912.47 crore. On Tuesday, the Sensex closed 313.70 points or 0.37 per cent lower at 84,587.01. Nifty fell 74.70 points or 0.29 percent and closed at 25,884.80.
