Dovish Fed, China’s stimulus plans lift benchmark indices

Dovish Fed, China’s stimulus plans lift benchmark indices

Indian markets made a strong comeback on Tuesday, following the rally in global markets after US dollar and treasury yields dipped on the back of dovish comments by Federal Reserve, a day after Israel-Gaza conflict resulted in panic selling that wiped out about 3.68 trillion of investor wealth.

S&P BSE Sensex climbed about 567 points, or 0.87% to close at 66,079.36, while Nifty50 rose 177 points, or 0.91%, to end at 19,689.85. On an intraday basis, both the benchmarks climbed over 1%.

Sluggish demand from key economies will refrain the crude oil prices to stay elevated for long, experts added. Brent crude currently trades at $87.85 per barrel, as of 6.45 p.m. IST, 0.34% lower from Monday’s close of $88.15 per barrel.

“The key factor that is driving the Indian markets is that the geopolitical tensions between Israel and Gaza will be contained within that region only. Alongside, very strong expectations for the upcoming results will aid,” said Ashutosh Mishra , Head of Research- Institutional Equities at Ashika Stock Broking. The performance of global markets and the commentary by Iran, Turkey, who backed off after U.S. extended support to Israel, has led to the realisation that markets are far better placed than what people were expecting, he added.

Realty stocks lifted the market sentiments on the back of good sales performance in the second quarter ended September. Nifty Realty and BSE Realty, both surged to their 15-year high values, closing up 4.01% at 606.20 and 4.08% at 4,842.12, respectively. This was followed by metals and telecommunication stocks, with BSE Telecommunication rising 2.24%, while BSE Metal index climbed 2.59% on Tuesday.

China considering a fiscal stimulus has led to metal stocks and the BSE Metals index rally today, said Mishra. Meanwhile, there is a lot of buzz going on regarding recent presentation by telecom minister on technology development and telecom infrastructure expansion plans next year, that has stirred up telecom stocks today, he added.

The midcap and smallcap gauges outperformed the benchmarks. BSE Midcap surged 1.14% to 32047.51, while the BSE smallcap gained 1.26% to 37678.75.

The banking indices also outperformed the benchmarks, with BSE Bankex rising 1.24% and Bank Nifty gaining 1.08%.

The investor wealth rose by Rs 3.53 trillion to Rs 319.71 trillion on Tuesday.

FPIs sold shares worth Rs 1,005.49 crore while DIIs bought equities worth Rs 1,963.34 crore on Tuesday, according to the provisional data by exchanges.

Bharti Airtel, Kotak Mahindra Bank and Tata Motors were the top gainers of Sensex, whereas, IndusInd Bank, Tata Consultancy Services and Titan Company were the top losers.