Sensex Surges Over 600 Points To Breach 59,000 Level, Extends Gains For Third Straight Session

Indian equity benchmarks rose on Tuesday, extending their gains for the third day in a row, tracking the strength of Asian peers and overnight advances on Wall Street driven by improvement in risk sentiment led by strong corporate earnings updates and Britain’s reversal of a fiscal policy.

The 30-share Sensex index climbed 603.69 points, or 1.03 per cent, to 59,014.67 in early trade, and the broader NSE Nifty-50 index advanced 172.40 points, or 1 per cent, to 17,484.20, with both benchmarks extending their rally for the third straight day.

In the previous session, the Sensex index gained 491.01 points to end at 58,410.98 points, and the Nifty rose 126.10 points to 17,311.80 points, reversing losses in early Monday trade.

Tuesday saw Asian stocks rise and a fall in the dollar to its lowest levels in more than a week as the relief rally extended its momentum after UK U-turn, bolstering global market sentiment.

The Nasdaq and S&P 500 futures were up 0.8 per cent after the S&P 500 rallied to close above a key technical level.

Japan’s Nikkei gained around 0.6 per cent, and the MSCI’s broadest index of Asia-Pacific shares outside of Japan rose over 0.4 per cent.

As the twice-a-decade Congress of the Chinese government’s Communist Party remains in session this week, the stock market in China opened almost flat.

Trading in Asia, though, might inject a note of caution as a result of China’s decision to postpone the release of important economic data, such as the third-quarter gross domestic product, with little hints of relaxation in China’s Covid-zero and property-market regulations, which are hurting the country’s economic activity.

Banking sources told Reuters on Monday that Chinese state banks were increasing their intervention to protect the depreciating yuan, and numerous businesses have announced share repurchase plans.

Global recession risks are also on the rise.

The 12-month projection of a downturn by October 2023 hitting 100 per cent, according to the most recent US recession probability models by Bloomberg economists Anna Wong and Eliza Winger, predicts a higher risk of such an event across all time frames.

That is an increase from 65 per cent for the same time period in the prior update.

According to Bloomberg, Morgan Stanley’s Mike Wilson said that the decline that forced the S&P 500 to test a “real floor of support” may result in a technical comeback as analysts debated when stocks would reach a bottom.

One of Wall Street’s leading negative voices, the strategist said he “would not rule out” the measure increasing to around 4,150. That is a 13 per cent increase above current levels.

However, Wells Fargo Investment Institute anticipates that business profitability will continue to face difficulties.

“Our earnings estimates have been below the consensus for quite some time,” global strategist Gary Schlossberg said on Bloomberg Television. “We think that there’s still some further downward revisions to come.”

In other markets, following a bumpy session on Monday, oil prices edged up as investors weighed signals of a tight market against worries about a slowing global economy. Gold was stable, and Bitcoin traded below $20,000 per coin.