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Sensex: D-Street investor wealth surges by Rs 4 lakh crore. 5 factors behind today’s rally

The mind-bending rally on Wall Street overnight, which came after new data showed high inflation in the US, had a calming effect on Dalal Street ahead of the Diwali festival. As the Sensex rose more than 1,000 points on Friday, investors got richer by about Rs 4 lakh crore as the total market capitalization of all shares listed on the BSE skyrocketed to Rs 273.82 lakh crore.

Here are the key factors behind today’s rally:

Global clues

The US market broke a six-day loss streak and made a comeback on Thursday with the Dow rising 2.8% and the Nasdaq rising 2.2%, although new data showed high inflation in the US. The rally, which many attributed to technical factors and short coverage by traders, left analysts searching for explanations.

“The market turnaround was a specter. Despite a warm inflation report, US equities turned positive as some investors believe core inflation will fall soon,” said OANDA market analyst Edward Moya.

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Tokyo’s Nikkei benchmark index and Hong Kong’s Hang Seng both rose more than 3% after strong gains on Wall Street. Analysts said earnings could decline quickly as investors grapple with the reality that rising US inflation is likely to lead to longer interest rates, hastening a global recession.

Crude oil prices

Both Brent and WTI crude oil prices fell about 3% this week after two previous weeks of gains amid concerns about a recession. Brent crude was trading below $95 a barrel.

dollar index

The dollar index had changed little after dropping 0.5% in the previous session as investors processed data showing US consumer prices rose more than expected in September. The Indian rupee rose 3 paise to 82.21 against the US dollar.

Technical factors

On Thursday’s weekly expiration, Nifty respected the Put base at 17,000 and ended just above that amid broader market weakness. “Also for the upcoming weekly settlement, ATM attacks hold the highest option base, indicating broader range-bound movement,” he said.

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Card readers said Nifty has formed a triple bottom in the band of 16,950-16,960 in the past three days. After the return of positive sentiments around the world, Nifty could now resist at 17262 and then at 17429.

Income Factor

After beating Street estimates in the Q2 numbers,

was among the top winners in Nifty. The stock rose about 4%. With an increase of more than 2%, Nifty IT was among the top sector winners today. In addition to Infosys, several other IT majors — and — released their quarterly earnings this week.



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