The US debt ceiling impasse seems to have been resolved which led to a sharp bounce back in US market after a very weak opening yesterday. Energy prices cooled off a bit which should also aid bullish sentiments, said an analyst.
“Outcomes of probable taper timelines, MPC meeting and Q2 results are likely to be market moving. An area of concern is the MPC sounding caution on the inflation front and gradually moving away from accommodative monetary policy. Also the central bank will have to initiate measures to absorb the excess liquidity in the system,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
How are bluechips doing
After opening in the green, benchmark indices maintained the lead. At 9.20 am, BSE flagship Sensex was up 495 points or 0.84 per cent to 59,685. NSE benchmark Nifty advanced 140 points or 0.79 per cent to 17,786.
“Nifty made a bearish engulfing candle on Wednesday. Now, the level of 17,830 can act as a good resistance and there is a strong support at 17,500 level,” said Mohit Nigam, Head – PMS, Hem Securities.
In the 50-share pack Nifty, Titan was the biggest gainer, up 8.37 per cent. Tata Motors, IndusInd Bank, Eicher Motors, ICICI Bank, SBI Life Insurance and Reliance Industries were among other gainers.
ONGC was the top loser in the pack, down 2.17 per cent. Divi’s Labs and Britannia Industries were among those that traded in the red.
FACTORS DRIVING MARKETS
Crude oil cools off: Oil prices dropped back from multi-year highs hit a day earlier, having been a major contributor to this week’s equities sell off. Gas prices also fell, a day after Russian leaders indicated that supply to Europe could increase.
Yields drop: The yield on benchmark 10-year Treasury notes was 1.5415 per cent off from Wednesday’s three and a half month high of 1.573 per cent. The dollar was steady, not too far from 12-month highs hit last month against a basket of currencies, and held at a 14-month high against the Euro.
US debt default fears wane: The U.S. Senate appeared near to a temporary deal to avert a federal debt default in the next two weeks, after Democrats said they might accept a Republican proposal to defuse the partisan standoff that threatens the broader economy.
Q2 update: Many companies are coming out with September quarter updates that may see sharp movement in individual shares. Most analysts expect earnings to grow significantly.
Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 1.24 per cent while Nifty Midcap advanced 1.04 per cent. Broadest index on NSE, Nifty 500 was up 0.90 per cent.
Dilip Buildcon, Chambal Fertilisers, Firstsource Solutions, Prestige Estate, Whirlpool and Gujarat State Petronet were gainers from the space while Oil India, Deepak Nitrite, Astral Pipes, Balaji Amines, Laxmi Organic and Bajaj Electricals were under selling pressure.
Global markets
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.25 per cent in early trade, regaining ground lost in recent days to be little changed on the week.
As oil prices came off on Thursday, there were gains in share benchmarks in Korea up 1.3 per cent, Australia up 0.64 per cent, and Hong Kong up 2 per cent.
Japan’s Nikkei rose 0.89 per cent, and U.S. stock futures, the S&P 500 e-minis, gained 0.42 per cent. Chinese markets remained closed for a holiday.
