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Indian markets recorded a strong rally on Tuesday with Sensex nearing the 58,100 mark and Nifty 50 climbing over 17,280 levels. All sectoral indices witnessed a bull run with banking, capital goods, metals, and IT stocks emerging as the best performers. Midcap stocks outrun small cap stocks, however, both baskets garnered significant buying. Domestic equities tracked positive global cues while preparing for the second quarter earnings for FY23. The Indian currency appreciated against the dollar at the forex market as the greenback tumbled while treasury yields retreated. Foreign funds inflow also gained traction. Meanwhile, crude oil prices soared ahead of the OPEC+ meeting where an output cut is expected. Due to a bullish stance, investors' wealth rose more than ₹5.66 lakh crore in 1 day.
Sensex surged by 1,276.66 points or 2.25% to close at 58,065.47. The benchmark had touched an intraday high of 58,099.94.
Meanwhile, the Nifty 50 soared by 386.95 points or 2.29% to end at 17,274.30. The benchmark has jumped to the day's high of 17,287.30.
On BSE, in terms of sectoral indices, Bankex index soared by 1,188.54 points, while the IT and Capital Goods index zoomed by 728.85 points and 713.98 points. Metal index was up by 612.06 points. Meanwhile, on NSE, the Bank Nifty surged by 1,080.40 points.
Mitul Shah - Head of Research at Reliance Securities said, "Indian equities closed higher following positive global cues while the market prepare for the upcoming earnings season."
As of October 4, the market cap of BSE-listed firms stood at ₹2,73,92,739.78 crore -- rising by ₹5,66,318.84 crore from ₹2,68,26,420.94 crore of the previous day.
Vinod Nair, Head of Research at Geojit Financial Services said, "Mirroring a robust overnight surge in Wall Street and upbeat domestic business data released by banks, the domestic market ended the day on a cheerful note. An unexpected slowdown in the US Manufacturing PMI gave hope that the US Fed would slow the pace of policy tightening. Following suit, US bond yields fell in tandem with the US dollar."
At the interbank forex market, the Indian rupee strengthened on Monday as a downturn in the dollar while bond yields pulled back. The local unit closed at 81.52 against the US dollar from the previous day's closing of 81.8725 per dollar. The rupee had touched the day's high of 81.3650.
Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities said, "USDINR spot closed at 81.52, down 35 paise, due to fall in the US Dollar Index and pullback in the US yields. Rally in stocks also helped. Over the near term, US economic data like ISM services and US NFP report will provide direction. We expect a range of 81.20 and 82 on spot."
Further, Jateen Trivedi, VP Research Analyst at LKP Securities said, "Rupee traded strong with gains of 0.30% or 0.25p against the dollar where the dollar index hangs below 112$ giving some respite to other currencies. Positive FIIs number leading rupee to gain lost ground in a weak global recession position minus India. The Crude prices however have shown positive activity which can dampen the ongoing cheer as OPEC will announce production cuts number amid falling demand it fears due to recession. Rupee going ahead is expected in the range of 81.00-81.80."
Meanwhile, foreign investors' (FII) funds inflow picked up momentum in the first two days of October. On Tuesday, FIIs pumped in ₹1,344.63 crore cumulatively in the equities market. On October 3, FIIs turned net buyers with an inflow of ₹590.58 crore. In overall September month, FIIs were net sellers with an outflow of ₹18,308.30 crore from equities.
Also, Shah added, "The market sustained deep losses for the first nine months of the year as central bank officials have increasingly made clear that interest-rate increases and monetary tightening will continue."
Going forward, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, "the short-term market structure is positive but due to temporary overbought condition we could see range bound activity in the near future. for the traders now, 17200-17150/57800-57600 would be the key support zone whereas 17400-17425/58300-58400 would act as an important resistance zone for the index. buying on intraday correction and sell on rallies would be the ideal strategy for the day traders."