The market saw a healthy rebound after consolidation in the previous three sessions, with the Nifty50 reclaiming the crucial 17,000 mark on December 1. Short covering as well as value buying in leading quality stocks were supporting the market.
The BSE Sensex jumped 547.20 points or 0.96 percent to 57,612.07, and the Nifty50 climbed 159.10 points or 0.94 percent to 17,142.30.
Broader markets saw a mixed trend with the Nifty Midcap 100 index rising half a percent, and Smallcap 100 index down 0.2 percent.
Here are five factors driving the market higher:
Global Cues
Asian markets bounced back after a day of losses as investors are closely monitoring developments related to the new Covid variant Omicron, which has spread to more than a dozen countries globally, leading to fresh travel curbs.
Hong Kong's Hang Seng was up 1.11 percent and South Korea's Kospi gained 2.14 percent during the day. Japan's Nikkei and China's Shanghai Composite were up 0.4 percent each.
US stock futures were also higher on the first day of December, indicating positive US opening in the evening. Dow Jones futures gained half a percent, S&P 500 futures rose nearly 1 percent and Nasdaq Composite futures climbed 1.5 percent.
November PMI
India's manufacturing PMI strengthened further in November, indicating consistency in economic recovery.
"Increasing from 55.9 in October to 57.6 in November, the seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) signalled the strongest improvement in the health of the sector for ten months. Moreover, the headline figure was well above its long-run average of 53.6," said IHS Markit in its report.
India's manufacturing PMI (seasonally adjusted) stayed in expansion territory for the fifth straight month. "The PMI expansion was led by improvements in production and new orders, though cost pressures remain elevated. However, the survey was conducted before the emergence of the Omicron variant (12-24 November), so the data may not completely capture a possible increase in risk perceptions," said Rahul Bajoria, Chief India Economist at Barclays.
Auto Sales
The Nifty Auto index gained more than 1 percent, supported by monthly sales data released today. Eicher Motors, Maruti Suzuki, Tata Motors, and Ashok Leyland gained 1-3 percent in trade.
Tata Motors reported a 15 percent year-on-year growth in commercial vehicle sales at 32,245 units and 38 percent growth in passenger vehicle domestic sales at 29,778 units in November.
Eicher Motors' commercial vehicle sales increased 3.1 percent year-on-year to 3,184 units in November, while Ashok Leyland sold 10,480 units in November, which was ahead of CNBC-TV18 poll estimates of 9,700 units.
However, TVS Motor Company's sales fell 17.2 percent year-on-year to 2.72 lakh units, and Bajaj Auto's sales declined 10 percent to 3.79 lakh units in November. Escorts' tractor sales dropped 30 percent YoY to 7,116 units during the month.
GST Collections
GST collection of Rs 1.31 lakh crore in November is the second highest ever since the introduction of GST (Goods & Service Tax). In April, collections hit a record high of Rs 1.39 lakh crore.
Out of the Rs 1,31,526-crore gross GST revenue collected in November, CGST stood at Rs 23,978 crore, SGST was at Rs 31,127 crore, and IGST was at Rs 66,815 crore. Revenue for November is 25 percent higher than the GST revenue mopped up a year ago, and 27 percent higher than in 2019-20.
Sectoral Performance and Technical View
All sectoral indices, barring pharma, were in the green. Nifty Bank, financial services, IT, metal and PSU bank indices gained more than 1 percent each.
IndusInd Bank was the biggest gainer, up over 5 percent. Axis Bank, Tech Mahindra, Maruti Suzuki and Reliance Industries were other drivers for the index, rising 2-3 percent. However, Dr Reddy's Labs and Sun Pharma were top losers, down over a percent each.
The Nifty50, so far, saw a bullish candle formation on the daily charts. If the index holds above the 17,000 mark, there could be further upside in the coming days, said experts. However, the overall volatility is expected to continue until the market has a firm direction.
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