MUMBAI: The stock market concluded the trading day on a positive note, buoyed by a range of factors contributing to the optimistic sentiment. The US Federal Reserve’s decision to maintain the key policy rate at 5.25-5.50 per cent, for the second consecutive time, was in line with market expectations. This move contributed to the positive sentiment worldwide.
Furthermore, the US jobs data for October revealed a slowdown that exceeded expectations, giving rise to hopes that the Federal Reserve’s interest rate hiking cycle may be coming to a close, which further bolstered investor confidence.
The benchmark Sensex surged by 594.91 points, reaching a closing figure of 64,958.69, while the Nifty added 181.15 points to close at 19,411.75.
Among the Nifty companies, advances significantly outnumbered declines, with 45 advancing and only 5 declining.
Notable gainers among the Nifty companies included Divi’s Lab, Eicher Motors, Hero Motocorp, Axis Bank, and Larsen & Toubro. In contrast, SBI, Hindustan Unilever, Cipla, Tata Motors, and Titan were the top losers for the day.
Varun Aggarwal, founder and managing director, Profit Idea, said, “Market closed on a strong note on account of the global market rally between 1-3 per cent, easing concerns about further interest rate hikes by US Fed, better than expected domestic quarterly results, US 10-year bond yield and Dollar Index fell to 2-month low which will be positive for the market sentiment. US 10-year Bond Yield slipped 8bps to a 2-month low at 4.57 per cent. US VIX fell to a 2-month low at below 15”.
The strong market closure was attributed to several factors.
A global rally with gains ranging from 1 per cent to 3 per cent, improved sentiments about further interest rate hikes by the US Federal Reserve, better-than-expected domestic quarterly results, a decline in the US 10-year bond yield, and a two-month low for the Dollar Index all contributed to the bullish outlook.
The US 10-year Bond Yield fell 8 basis points to reach a two-month low at 4.57 per cent, while the US VIX also reached a two-month low, falling below 15.
Aggarwal added, “European stocks extended gains for a fifth day as risk-on bets poured into this year’s beaten-down sectors as US jobs data bolstered speculation that the Federal Reserve is done with interest-rate hikes”.
European stocks continued to climb for the fifth consecutive day as investors channelled their optimism into sectors that had experienced a challenging year, fueled by hopes that the Federal Reserve’s interest rate hikes have reached their peak.
“Shares in Asia advanced following Friday’s rally in US stocks and bonds as investors gave further credence to the idea interest rates are near the cycle peak. It will be interesting to see how Nifty moves forward. Nifty has good resistance at 19463-19767 levels. On downside, support lies at 19210. Major support lies in 18837. OI data has strong call writing at 19500 levels and put writing at 19000 levels. We remain biased on Indian economy. Expect India to outperform global markets. On the sectoral front, we remain positive on IT, Pharma, Banking, FMCG, Petrochemicals, Metals”, said Aggarwal.
In Asia, shares advanced following a strong rally in US stocks and bonds, as market participants increasingly considered the notion that interest rates might be nearing the cycle’s peak.
Looking ahead, market observers will be keen to see how the Nifty performs, with notable resistance at the 19,463-19,767 levels and support at 19,210, and major support at 18,837. Options data revealed substantial call writing at the 19,500 levels and put writing at the 19,000 levels.
In terms of India’s economic outlook, a positive bias is retained, with expectations for India to outperform global markets. Several sectors, including IT, Pharma, Banking, FMCG, Petrochemicals, and Metals, remain favorable for investors. (ANI)