Sensex, Nifty Jump To Recover From Two Straight Sessions Of Losses
Indian equity benchmarks opened in the green on Thursday, tracking a recovery in a broader Asian stocks gauge from the lowest since the pandemic-led mayhem but trailed the rally on Wall Street as oil prices steadied at levels not seen since before Russia’s invasion of Ukraine.
The BSE Sensex index jumped 550.73 points to 59, 579.64 in early trade, and the broader Nifty index rose 156.1 points to 17,780.50.
On Wednesday, both the equity benchmarks fell for the second straight session driven by a sell-off in global stocks and commodities.
Ahead of the markets open, Prashanth Tapse, Senior Vice President for Research at Mehta Equities, said “after two days of a steady fall, local equity benchmark indices are likely to see a firm opening, mirroring gains in US markets and the subsequent move up in other Asian peers. The rise in US indices were seen despite a Fed official making clear that the focus is to keep a tight leash on inflation.”
“Bargain hunting and value buying is likely to be the preferred theme as the benchmark Nifty braces for a massive technical break-out on the upside,” he added.
A recovery on Wall Street helped the MSCI index of Asia-Pacific stocks outside of Japan recover after dropping to lows last seen in the aftermath of the 2020 pandemic.The Nikkei index of Japan rose 1.96 per cent in early trading. The S&P/ASX 200 index in Australia advanced 0.72 per cent while MSCI’s broadest index of Asia-Pacific equities ex-Japan jumped 0.33 per cent.
But that fell short of rallies of about 2 per cent in the S&P 500 and Nasdaq 100 overnight, with all three of the major Wall Street indices experienced big advances.
As traders assessed the stock rebound, Hong Kong and China were sluggish, and US futures fluctuated.
The announcement of worse-than-anticipated trade figures and the prolonging of a lockdown in Chengdu showed no easing in the country’s rigorous zero-COVID policy, sending blue chips in China marginally lower.
While the price of oil has partially recovered this week, demand threats from a wave of monetary tightening and China’s Covid troubles were flagged by the slump. Chengdu, a massive Chinese metropolis city, prolonged a weeklong lockdown in most of its downtown districts.
Crude prices steadied, but were below $90 per barrel for the first time since Russia invaded Ukraine late in February.
Investors turn their attention to the European Central Bank rate-setting meeting and Fed Chair’s speech later today.
In order to combat inflation, central banks must raise interest rates rapidly, but they must do it carefully so as to avoid harming economic shrinkage. Market volatility caused by the uncertainty has led to significant losses for bonds and stocks this year.
“The stock market has rallied several times even as the bond market has shown lots of negative volatility and the dollar continues to creep up,” Federated Hermes Senior Equity Strategist Linda Duessel said on Bloomberg Television.
“You have to wonder when can we expect a sustained rally here or to think we are out of the woods,” she added.