Bulls charged back on Dalal Street on Monday amid positive global cues. The BSE Sensex surged around 800 pts or 1.4% to hit an intraday high of 60,724.40, while NSE Nifty 50 soared over 240 pts or 1.3% to top 18,100. Nifty major trend-deciding level remains at 18300, which would turn the tide once again in favor of bulls, according to analysts. “In case of recovery, the broader end of the spectrum would outperform heavyweights and we would probably then witness a beginning of the pre-budget rally. Also, with result season kicking in, all focus would first be on major IT heavyweights, which would dictate the near-term direction for this underperforming space,” said Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One.
What’s fueling share market rally today in India
Positivity from US, Asia-Pacific equities trickle to Indian share market
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. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.5% to a five-month top, with South Korean shares gaining 2.1%. Chinese blue chips added 0.4%, while Hong Kong shares climbed 1.4%. Wall Street’s main indexes all gained more than 2% 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 2.13%, to 33,630.61; the S&P 500 gained 2.28%, at 3,895.08; and the Nasdaq Composite added 264.05 2.56%, at 10,569.29.
“The US economic data released on Friday is significant from the global market perspective. All data point to a strong but cooling US economy which indicates the rising possibility of a soft landing for the US economy. The December jobs increase was 223,000, the lowest in 2 years. The hourly wage increase slowed to 4.6% against the recent peak of 5.6%. All these points to cooling inflation and the possibility of the Fed going less hawkish in 2023,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
Rupee appreciates against US Dollar
The Indian Rupee strengthened 32 paise to 82.34 against the US dollar in early trade on Monday. Rupee, at the interbank foreign exchange, opened at 82.41 against the dollar, then gained ground to touch 82.33, registering a rise of 33 paise over its previous close. “Market sentiments improved as fresh data showed slowdown in wage growth, a buoyant sign for Fed battle against inflation that could ease the pressure for further rate hike. Further, softening of crude oil prices will support rupee,” said ICICIdirect, adding that US$INR (January) is expected to trade in a range of 82.30-82.75.
“Market experiencing buying from the support area, where NIFTY 50 has marked support of 17800 and now trading above 18100 levels, On the daily chart NIfty 50 is bullish. MACD Histogram is above the zero line with positive crossover suggesting the upward movement is on the way in the near-term, One should remain bullish on Nifty 50 as long as the 17800 level is intact. On the higher side, 18250 will be the next hurdle once it crosses and sustains above it then 18420 and then 18600 levels are possible,” said Rameshver Dongre, Research Analyst – Equity Research, CapitalVia Global Research.