Markets further up on renewed hopes on US rate cut

Mumbai: Stock market benchmark indices Sensex and Nifty surged nearly one per cent on Monday, propelled by intense buying in metal, IT and consumer durable stocks amid hopes that the US Federal Reserve will start cutting interest rates soon. Renewed Foreign fund inflows and buying in frontline stocks HDFC Bank and Reliance Industries further bolstered investor sentiment, traders said.

Rising for the fifth straight day, the 30-share BSE Sensex jumped 611.90 points or 0.75 per cent to settle at 81,698.11 points. During the day, Sensex surged 738.06 points or 0.91 per cent to 81,824.27 points. A total of 2,189 stocks advanced, while 1,860 declined and 148 remained unchanged on the BSE. The NSE Nifty soared 187.45 points or 0.76 per cent to 25,010.60 points, registering gains for the eighth session in a row. Market capitalisation (mcap) of BSE-listed companies rose by Rs2.33 lakh crore to Rs4,62,29,959.17 cr (Rs462.29 lakh cr or $5.51trn).

“US Fed has signaled a rate cut in September, reflecting in the decline in US treasury yields and the dollar index, which has led to a rally in global markets despite there being no indication of the size of cuts. Indian markets hit a new high led by a change in FII stance to positive from negative, along with continued strong DII inflows. Although the overall trend was positive, large caps outperform on account of healthy earnings and relatively fair valuation compared to broader markets. IT, Realty, FMCG and Consumption gained on account of improved outlook,” said Vinod Nair, head (research), Geojit Financial Services.

In the broader market, the BSE midcap gauge jumped 0.66 per cent and the smallcap index soared 0.20 per cent.

“Markets kicked off the week on a positive note, gaining over half a per cent, driven by a Dovish stance from the US Fed. Optimism was the order of the day as Dovish statements by the Fed Chair last week sparked positivity across the globe and also at Dalal Street.