Sensex surges over 700 points: What is fueling today's rally?
What's the story
The Indian stock market witnessed a strong rally today, with the S&P BSE Sensex and NSE Nifty 50 both posting significant gains. The Sensex surged over 700 points to 84,918 mark while the Nifty climbed over 200 points to breach the 26,000 level. This upward trend was largely fueled by softer-than-expected inflation data from the US and expectations of two more interest rate cuts in 2024.
Stock highlights
Financial sector outperforms
On the 30-share Sensex, leading gainers included Tata Steel, Bharti Airtel, TCS, Reliance Industries, and State Bank of India. These stocks rose up to 2%. The financial sector also outperformed with the Nifty Bank index rising by 0.4% and the Nifty PSU Bank index climbing by 1.1%.
Market trends
Broader markets also witness positive trend
The broader markets also witnessed a positive trend with the small-cap index rising by 0.3% and the mid-cap index gaining by 0.4%. The US consumer price inflation eased in September, strengthening expectations that the Federal Reserve will announce rate cuts at its upcoming policy meetings in November and December. Softer US rates usually make emerging markets like India more attractive to foreign investors.
Global influence
Global market construct is bullish
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the global market construct is bullish with Dow Jones, Nikkei, and Kospi at record highs. He added that globally there are signals of declining trade tensions. For India, he observed positive fundamentals with brisk festival season sales and a smart pick-up in capital spending by the private sector.
Investor actions
Oil prices rise on potential US-China trade deal
On the institutional front, Foreign Institutional Investors (FIIs) bought equities worth ₹621.5 crore on October 24, while Domestic Institutional Investors (DIIs) were net buyers to the tune of ₹173 crore. Oil prices also rose in early Asian trade today after US and Chinese officials outlined a framework for a potential trade deal, easing concerns over tariffs and export controls affecting global growth.