Stock market today: Domestic equity benchmarks Sensex and Nifty 50 snapped their three-day losing streak on Wednesday, August 7, over strong global cues tracking a rally in global markets and value-buying in metal, IT and oil shares at lower levels. The recovery comes ahead of the Reserve Bank of India (RBI)'s Monetary Policy Committee (MPC) policy decision, due Thursday.
The BSE benchmark Sensex jumped 874.94 points or 1.11 per cent to settle at 79,468.01. During the day, it soared 1,046.13 points or 1.33 per cent to 79,639.20. The NSE Nifty jumped 304.95 points or 1.27 per cent to 24,297.50. Intra-day, it surged 345.15 points or 1.43 per cent to 24,337.70.
The frontline indices have declined around four per cent in the past three sessions amid a global market rout. Unwound yen carry trades, and a weak US jobs report sparked fears of a recession in the world's largest economy.
The broader market's BSE midcap gauge jumped 2.63 per cent, and the smallcap index climbed 2.39 per cent. With the recovery, the market capitalisation of BSE-listed firms went up by ₹8,97,352.99 crore to ₹4,48,57,306.55 crore ($5.34 trillion). Investors' wealth had eroded by ₹22 lakh crore in the past three days of the market slump.
While global markets rebounded on Tuesday after comments from US Federal Reserve officials eased some investors' worries over the recession, the Indian markets' recovery was delayed by one day due to profit booking near record-high levels and rich valuations.
RBI's rate-setting panel started its three-day deliberations on Tuesday for the next set of bi-monthly monetary policy amid expectations of no change in the benchmark interest rate, given concerns about inflation and economic growth remaining steady. The central bank's policy verdict by RBI Governor Shaktikanta Das-headed six-member MPC will be announced on August 8 at 10:00 am.
The Indian rupee fell to a record low of 83.9725 against the US dollar, surpassing its previous low of 83.96 due to strong dollar bids and importer hedging. The domestic unit is expected to trade with a negative bias amid a stronger dollar and geopolitical tensions in the Middle East. However, positive global equities and potential RBI interventions might offer support.
Among Sensex firms, Adani Ports & SEZ rose the most by 3.42 per cent. Power Grid climbed 3.39 per cent, Tata Steel by 2.4 per cent and JSW Steel by 2.61 per cent. Infosys, HDFC Bank, ITC, Reliance Industries, Mahindra & Mahindra, Maruti, and Larsen & Toubro also advanced.
IndusInd Bank, Bharti Airtel, Hindustan Unilever, Tech Mahindra, and Titan were the laggards. As many as 2,985 stocks advanced, 948 declined, and 98 remained unchanged. 44 of the Nifty 50 stocks advanced, led by Coal India, Adani Enterprises, and Adani Ports, which surged to 7.45 per cent.
The state-run Oil & Natural Gas Corp (ONGC) reported a quarterly profit beat earlier this week, and analysts said its sustained earnings momentum was a key positive catalyst. Lupin surged 4.4 per cent after the drugmaker reported a higher-than-expected profit for the June quarter.
All major sectoral indices ended in the positive territory on Wednesday. Most sectors contributed to the upward movement, with metals, energy, and pharma as the top performers.
Oil & Gas jumped 3.75 per cent, metal surged 3.44 per cent, energy (3.32 per cent), capital goods (2.89 per cent), telecommunication (2.80 per cent), services (2.53 per cent), commodities (2.49 per cent), healthcare (2.03 per cent).
The realty index jumped about two per cent after the government relaxed new tax rules that would have likely led to higher capital gains tax on certain property sales. The oil and gas and public sector companies gained about three per cent and four per cent, respectively, led by a 7.5 per cent jump in ONGC.
"Global markets experienced a notable rebound after the BoJ's Deputy Governor reassured that the central bank would not raise interest rates during a period of financial instability,'' said Vinod Nair, Head of Research, Geojit Financial Services on today's market performance.
‘’The Indian market also witnessed broad-based buying across sectors, with the realty sector seeing a relief rally due to the reinstatement of indexation benefits. The carry trade issue appears to have been eased for now, and the focus is on the ongoing RBI policy, which is likely to hold the rate and positive economic outlook,'' added Nair.
Prashanth Tapse, Senior vice president (Research) at Mehta Equities Ltd, said, “Domestic markets rallied sharply, much in sync with optimism in global equity indices, although risk-off sentiment could still prevail due to rising tension in the Middle East. Markets may have gotten little respite from the recent carnage, but indices may witness sharp intra-day volatility due to global uncertainty.”
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"Nifty remained sideways during the session as traders waited for Thursday's RBI monetary policy meeting. An indecisive candlestick pattern is visible on the daily chart,'' said Rupak De, Senior Technical Analyst, LKP Securities
‘’On the higher end, resistance is observed at the 24,400-24,500 levels. Selling pressure around that level might induce a correction in the market. On the higher end, the trend might change to bullish if Nifty gives a decisive breakout above 24,500,'' added De.
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