Sensex rallies 1,000 points as global markets tumble
What's the story
The Indian stock market has shown remarkable resilience on November 6, defying weak global cues and continuing its upward trajectory. At the time of writing, the BSE Sensex surged by 1,025 points or 1.29% to 80,335 while the Nifty jumped over 200 points to 24,745. This comes despite a major rout in US markets due to fears of a slowdown in data center spending.
Market insights
US tech rout could benefit India: Geojit strategist
V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the tech rout in the US could actually benefit India.
He noted a 1% gain in the Nifty IT index on November 6.
Despite selling and profit booking by domestic institutional investors (DIIs), he expects the market to remain resilient due to continued foreign institutional investor (FII) buying amid changing global market conditions.
Rally support
Rally mainly driven by large-cap stocks
Vijayakumar also emphasized that the ongoing market rally is backed by impressive earnings growth, which has exceeded expectations.
He pointed out that this rally is mainly driven by large-cap stocks that had become attractively valued.
The Sensex rose 2.6% on November 5 while the Smallcap 100 index only crawled up by a meager 0.67%.
International impact
US tech rout hits global markets
Overnight, the Nasdaq Composite index crashed 5.52%, marking its biggest single-day decline in 19 months.
The slump was triggered by fears of stricter artificial intelligence (AI) regulations and a slowdown in data center construction.
This decline comes after the Democratic Party's victory is likely to dampen investor sentiment toward AI-related stocks, with elected governors expected to limit the growth of AI infrastructure.
In Asia, South Korea's Kospi and Japan's Nikkei 225 index lost over 5% each.