Why Market is Rising Today? Domestic investors shrugged off US Fed policy rate hike concerns and bought whatever they could find their hands on. Indian equity markets edged higher on Tuesday’s intra-day trade amid modest gains overseas. Key indices Nifty50 rose over 200 points to trade above 17,850 levels and the S&P BSE Sensex climbed over 800 points to hit a high of 59,945 levels.
Buying was seen across the market spectrum with auto, metal and realty stocks among top gainers. Barring Grasim that traded in the red, all stocks in the Nifty 50 traded with gains. Tata Motors was the biggest gainer, up 3.71 percent, followed by Hindalco Industries, IndusInd Bank, Bajaj Finserv and Eicher Motors.
All sectoral indices were in the green and so were the broader market indices. Nifty Metal was the biggest gainer followed by indices representing banks and financials.
Not just the US Fed but a host of other central banks like the Bank of England and the Bank of Japan would be announcing their monetary policies this week. Analysts say the equity market has fully priced in a 75 basis point rate hike and a big correction is possible only if Fed chair Jerome Powell opts for a 100 basis point hike, the chances of which seem low.
Wall Street’s main indices ended a seesaw session higher on September 19, setting the tone for markets elsewhere. The Dow Jones Industrial Average rose 197.26 points, or 0.64 per cent, to 31,019.68, the S&P 500 gained 26.56 points, or 0.69 per cent, to 3,899.89 and the Nasdaq Composite added 86.62 points, or 0.76 per cent, to 11,535.02.
All Asian markets traded with gains as well. Japan’s Nikkei was up 0.4 per cent; Singapore’s Strait Times also rose by about the same margin. Hang Seng, Taiwan Weighted, Kospi and Shanghai composite also traded with gains up to 1.5 per cent.
Foreign investors continued their bullishness on Indian stocks for another day. Foreign institutional investors (FIIs) net bought shares worth Rs 312.31 crore on September 19 even when domestic institutional investors (DIIs) net sold shares worth Rs 94.68 crore, as per provisional data available on the NSE.
Nifty Technical View
Most technical analysts see positive momentum to remain there at least in the medium term. Going ahead, ICICI Securities expects Nifty volatility to remain high ahead of Fed meet outcome wherein the index would consolidate and form a higher base to pave the way towards January 2022 high of 18,300 by October.
“In the process, strong support is placed at 17,300, which we do not expect to get breached. The index is undergoing healthy consolidation, which will help to cool off overbought conditions. Empirically, secondary correction is an integral part of the bull market that paves the way for the next leg of the up move. Thus, ongoing breather should not be construed as negative,” it said.