Bulls Are Back in Action, With a 2% Relief Rally; 58 Stocks Have Set New Highs

Banking growth

On October 4, the market saw a relief rally, with benchmark indices rising more than 2%, adding more than Rs 5 lakh crore to investors' collective kitty in a single day. Positive global cues backed this up, with US futures indicating a strong day on Wall Street.

The broader market was also involved in the rally, with the BSE Midcap and Smallcap indices gaining 2.4 percent and 1.5 percent, respectively. On the NSE, more than three shares advanced for every declining share.

As a result of the strong momentum, 124 stocks reached 52-week highs, according to BSE data, with 58 stocks reaching lifetime highs on Tuesday.

Eight of them were from the 'A' group, which included Apar Industries, Blue Dart, Garden Reach Shipbuilding, and others.

Bonlon Industries, BSL, Go Fashion, Inox Wind Energy, Karnavati Finance, Max Ventures, Metro Brands, Power Mech Projects, Rainbow Children's Medicare, and Safari Industries all set new highs in the 'B' Group category on Tuesday.

Bharti Airtel, Apollo Tricoat Tubes, Chalet Hotels, Cipla, Cochin Shipyard, IDFC First Bank, KRBL, Schneider Electric Infrastructure, Solar Industries, Liberty Shoes, Oil Country Tubular, SAL Steel, and Taj GVK were among the stocks that hit 52-week highs.

The rally was seen across sectors, with the BSE Energy, Industrials, Information Technology, Automobile, Bank, Financial Services, Capital Goods, Metal, Power, and Realty indices all rising 2-3%.

The BSE Sensex rose 1,276 points, or 2.25 percent, to 58,065, while the Nifty50 gained 387 points, or 2.25 percent, to 17,274, tracking the rally in European markets and US futures.

Globally, the DAX, FTSE, and CAC were trading 1.8-3 percent higher, while the Dow Jones, S&P500, and Nasdaq futures were up 1.3-2 percent at the time of writing.

Given the expected financial risks, market participants appear to believe that the US Federal Reserve will take its time tightening liquidity. If this holds true, foreign institutional investor (FII) flow may pick up in the coming days.

“The movement in the global markets is in anticipation of a pivot by the US Fed towards slowing down or stopping liquidity tightening due to various financial risks now apparent,” said Nishit Master, portfolio manager at Axis Securities PMS.

The rally was seen across sectors, with the BSE Energy, Industrials, Information Technology, Automobile, Bank, Financial Services, Capital Goods, Metal, Power, and Realty indices all rising 2-3%.

He went on to say that the business updates shared by banks and other financial intermediaries for Q2FY23 have been encouraging, and that the financial sector is thus leading the rally in India.

Master believes that the Bank Nifty and Nifty50 will continue to rise as long as the market believes that global central banks, particularly the Fed, will be willing to ease or postpone liquidity tightening measures.

The rally was so strong that it increased investor wealth by Rs 5.6 lakh crore, raising the BSE market capitalisation to Rs 273.9 lakh crore from Rs 268.26 lakh crore in previous session.

After eight trading sessions of consistent and significant selling, FIIs turned net buyers on Monday. On Monday, October 3, they purchased Rs 591 crore in shares.

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