Sensex climbs 300 pts to 81,150; Nifty at 24,550; HDFC Bank up 2%

Benchmark Indian equity indices BSE Sensex and Nifty 50 were trading higher on Wednesday, tracking firm global cues.

At 11 AM, the BSE Sensex was 264.18 points, or 0.33 per cent higher at 81,109.93, while the Nifty 50 was at 24,526, up 69.35 points, or 0.28 per cent.

Investors in the domestic market are likely to test the recent strenght in frontline Indian equity benchmark indices following three consecutive days of higher closes, led by firm global cues, and foreign institutional investors (FIIs) slowly returning to buying ways, or at least slowing down their continuous selling of Indian equities.

FIIs net bought stocks worth Rs 3,664.67 crore on Tuesday, while domestic institutional investors net sold shares to the tune of Rs 250.99 crore.

That apart, at the back of investors’ mind would be the Services and Composite PMI data for November, along with the Reserve Bank of India’s (RBI’s) Monetary Policy Committee (MPC) meeting that starts today and goes on till Friday, December 6, which could weigh on sentiment.

In another development, the ratio of market capitalisation to gross domestic product (GDP) in India remains elevated despite the recent correction in the equities markets. It was 147.5 per cent on Tuesday, 56 per cent higher than the 10-year average of 94 per cent. The current ratio is slightly lower than the all-time high ratio of 154 per cent at the end of September this year. It is the highest on record after December 2007 and September. READ MORE

Moreover, small and midcaps are leading the charge in the latest market rebound. Since November 21, when the BSE Sensex and Nifty50 hit their recent lows, the Nifty Smallcap 100 has risen by 8 per cent, while the Nifty Midcap 100 has gained 5.7 per cent. Meanwhile, the Nifty 50 has risen by 4.7 per cent during this period. READ MORE

In the previous trading session, benchmark equity indices, the BSE Sensex and Nifty50 extended gains for the third consecutive day to settle in the green. The Sensex advanced 597.67 points, or 0.74 per cent, to settle at 80,845.75 after climbing to the day’s high of 80,949.10, while the Nifty50 added 181.10 points, or 0.75 per cent, to close at 24,457.15.

The fear index, India VIX, which measures volatility in the markets, ended down 2.22 per cent at 14.37 points.

Among the broader markets, the Nifty Midcap100 and Nifty Smallcap100 indices settled with gains of 0.89 per cent and 0.84 per cent, respectively, while all sectoral indices ended in the green, barring Nifty FMCG and Pharma.

Nifty PSU Bank and Media indices ended higher by over 2 per cent each, followed by Bank Nifty, OMCs, and metal indices, all of which ended with gains of 1 per cent, respectively.

Apart from that, a day after South Korea’s President Yoon Suk Yeol imposed and then lifted martial law within hours, markets in the Asia-Pacific region were trading lower. The country’s Kospi index was down 1.8 per cent while the Kosdaq declined 2.18 per cent.

In other Asia-Pacific markets, Japan’s Nikkei 225 was trading 0.3 per cent lower, and the Topix was down 0.4 per cent. Hong Kong Hang Seng index was down 0.16 per cent, and the CSI 300 was down 0.27, while the Shanghai Composite was down 0.13 per cent. Australia’s S&P/ASX 200 was down 0.55 per cent.

Overnight in the US, both the S&P 500 and Nasdaq Composite closed at record highs, while the Dow Jones declined. Marketwatchers also digested reassuring comments from Federal Reserve policymakers. Two policymakers said they see inflation heading down to the US central bank’s 2 per cent target and that the job market is “solid.”

They stayed away from signaling whether they would support another interest rate cut later this month. On Monday, Fed Governor Christopher Waller said he was inclined “at present” to support another rate cut this month.

Investors will pay close attention to the US monthly employment report on Friday. They also are keen to see other data this week, including a November reading of private payrolls and the Institute for Supply Management’s services report.

A report on Tuesday showed US job openings increased solidly in October while layoffs dropped by the most in 1-1/2 years.

Financial markets expect a roughly 72 per cent chance of a 25-basis-point rate cut at the Fed’s December 17-18 policy meeting, CME Group’s FedWatch tool showed.

The Dow Jones Industrial Average fell 76.47 points, or 0.17 per cent, to 44,705.53, the S&P 500 gained 2.73 points, or 0.05 per cent, to 6,049.88 and the Nasdaq Composite gained 76.96 points, or 0.40 per cent, to 19,480.91.

Meanwhile, US-listed shares of South Korean companies declined, with iShares MSCI South Korea ETF easing 1.6 per cent.

Crude oil prices rose on Tuesday. Crude Oil futures were seen quoting around $70 per barrel, while Brent Crude tested levels of $73.50 levels. Gold futures, however, continued to remain steady around $2,662 per ounce.