Sensex, Nifty Extend Gains For Second Day, Tracking Higher Asian Stocks

Equity benchmarks extended their gains for the second day, tracking a rise in broader Asian stocks following China’s commitment to step up its economic stimulus efforts, with investors hoping for more clarity ahead of several central bank meetings.

The 30-share BSE Sensex index jumped climbs 320.69 points to 59,566.67, and the NSE Nifty Index rose 98.85 points to 17,764.65.

That comes after equity benchmarks rose on Monday, defying a broader sell-off in stocks on risks for a global economy already dealing with rising inflation and a wave of monetary tightening increased as a result of Europe’s increasing energy crisis.

As data pointed to a further loss of economic momentum, Chinese leaders signalled a fresh sense of urgency on Monday for moves to support a faltering economy, saying this quarter was a crucial time for policy action.

As a further indication that the government is uneasy about the yuan’s decline, China also reduced the cap on the ratio of its foreign exchange reserves.

Chinese officials also intend to speed up the stimulus programme, increasing support for an economy beset by Covid lockdowns, a housing slowdown, and power shortages, and that expected policy easing supported Asian bourses early on Tuesday.

China’s benchmark CSI300 Index and Hang Seng Index both opened up 0.2 per cent higher today, pushing the MSCI’s index of Asia-Pacific equities outside of Japan’s 0.47 per cent higher.

The benchmark stock index for Indonesia was expected to reach a new high on Tuesday as a result of rising energy and commodity prices.

To break the previous high established in April, the Jakarta Composite Index increased as much as 0.8 per cent to 7287.7 points. The sub-gauges for energy and industries had the best results.

But As gains in Japan and Hong Kong vanished and China fluctuated, an early surge in MSCI Inc.’s Asia measure fizzled.

“Although there are no major negative developments on the domestic front to trigger a downfall, the ongoing energy crisis in the European Union after Russia stopped fuel supply to the region could result in a sentimental impact across global markets, including India,” said Prashanth Tapse, Senior VP for Research at Mehta Equities.

“Also, caution will prevail in the wake of escalating China-US tussle and the hawkish Fed bets,” he added.

After the worst week for global shares since June, US share futures climbed amid a decline in the dollar even as central banks are on a tightening monetary policy path and Europe’s energy crisis continued to challenge confidence.

After OPEC+ decided to cut 100,000 barrels per day of production in October, crude prices rose.

Following Russia’s decision to keep a crucial pipeline shut, gas prices spiked in Europe on Monday, damaging the region’s stocks.