Why is Stock Market Rising Today? Bulls came raging on the D-Street as indices reversed gear to post a rebound on October 4, buoyed by upbeat quarterly updates by India Inc and heavy buying in the US and Asian markets. The declining dollar and US bond yield also lifted sentiment. Sensex rallied over 1,100 points and Nifty was placed above the 17,100 mark.
The market has been quite volatile in the last one week on global cues but now that the corporate earnings season is about to begin analysts are expecting the sentiment to improve. Since 2011, there have been only two occasions when Sensex has given negative returns in the festive month of October, which also marks the beginning of Q3 and the second half of the financial year.
“We expect (the Nifty50) index to sustain above the psychological mark of 17,000,” said analysts at ICICI Securities.
Market breadth favoured gainers. In the Nifty 50, 48 stocks gained led by IndusInd Bank, Bajaj Finance, Hindalco Industries, and TCS. Only two losers were PowerGrid and Dr Reddy’s Labs.
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said the risk-off, risk-on texture of the market is in response to fast changing economic and market signals.
“For the near term, market sentiments have turned positive with a declining trend in dollar and US bond yields,” he said. “If this trend continues, foreign institutional investors (FIIs) will again turn big buyers in India and they will not get stocks cheap. Financials and autos are again set to lead the uptrend since their fundamentals and prospects are strong. Capital goods are likely to join the rally and telecom is on a strong wicket.”
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