Stock markets rise for 2nd day on encouraging macro data, firm global trend

Mumbai: Benchmark equity indices Sensex and Nifty rallied for the second straight session on Monday following encouraging domestic macroeconomic data amid a firm trend in global markets. Fresh foreign fund inflows and intense buying in IT and commodity stocks also bolstered sentiment, traders said.

The BSE benchmark Sensex climbed 240.98 points or 0.37 per cent to settle at 65,628.14. During the day, it jumped 296.75 points or 0.45 per cent to 65,683.91. The Nifty rose 93.50 points or 0.48 per cent to end at 19,528.80.

"Recent domestic macroeconomic data have portrayed a positive picture for the domestic markets, allowing them to maintain their momentum. Despite profit-booking in Nifty Auto after reaching an all-time high, the market regained its footing with robust buying in IT stocks. "The increase in the US unemployment rate has solidified expectations of a pause in rate hikes, and positive global cues have further boosted market sentiment," said Vinod Nair, Head of Research at Geojit Financial Services.

Wipro was the biggest gainer in the Sensex pack, rising 4.34 per cent, followed by HCL Tech, UltraTech Cement, Tata Steel, Tech Mahindra, NTPC, Infosys, Power Grid, Tata Consultancy Services and State Bank of India. Mahindra & Mahindra, ITC, Axis Bank, Nestle, Kotak Mahindra Bank and Asian Paints were among the laggards.

In the broader market, the BSE midcap gauge climbed 0.96 per cent, and smallcap index gained 0.84 per cent. Among the indices, metal jumped 2.72 per cent, commodities climbed 1.94 per cent, utilities rallied 1.91 per cent, IT gained 1.74 per cent, power (1.55 per cent), teck (1.51 per cent) and services (0.59 per cent). FMCG and consumer durables were the laggards.

"Global Stocks were higher on Monday following a report that signalled the US jobs market, while still healthy, shows some signs of cooling, raising hopes for an easing of interest rate hikes. "Announcement of fresh stimulus measures from China - cutting down-payment requirements for first and second-time home buyers and lowered rates on existing mortgages also helped sentiments," Deepak Jasani, Head of Retail Research, HDFC Securities, said.

In Asian markets, Seoul, Tokyo, Shanghai and Hong Kong ended with gains. European markets were trading in the green in early deals. US markets ended mostly in the positive territory on Friday. American markets are shut on Monday due to the Labour Day holiday. Manufacturing activities in India gained momentum in August as new orders and output increased at the quickest rates in nearly three years, according to a survey released on Friday.

GST collections grew by 11 per cent to over Rs 1.59 lakh crore in August on the back of improved compliance and reduced evasion, with experts forecasting higher mop-up to continue in the upcoming festive season. Domestic passenger vehicle sales hit a record in August, led by highest-ever monthly dispatches from Maruti Suzuki on the back of festive demand and the continued strong offtake of SUVs.

Global oil benchmark Brent crude climbed 0.09 per cent to USD 88.64 a barrel. Foreign Institutional Investors (FIIs) were buyers on Friday as they bought equities worth Rs 487.94 crore, according to exchange data.

"The daily momentum indicator has a positive crossover which is a buy signal. We believe that the Nifty is in the process of retracing the fall it has witnessed from 19,992 to 19,223 and hence the pullback is likely to last over the next few trading sessions. "On the upside we expect the Nifty to target levels of 19650. In terms of levels, Crucial support zone is placed at 19420 – 19360 and immediate hurdle is placed at 19,650-19,700," Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas, said.

The BSE barometer had on Friday ended higher by 555.75 points or 0.86 per cent at 65,387.16. The Nifty had spurted by 181.50 points or 0.94 per cent to settle at 19,435.30.