Equity benchmarks the Sensex and the Nifty clocked strong gains on November 11 as investors’ risk appetite was boosted by signs of peaking US inflation which may potentially ease the pace of interest rate hikes.
Domestic equities mirrored positive global sentiment after the US consumer prices rose less than expected in October.
"US consumer prices rose less than expected in October, pushing the annual increase below 8% for the first time in eight months, the strongest signs yet that inflation was slowing, which would allow the Federal Reserve to scale back its hefty interest rate hikes," reported Reuters.
Sensex opened nearly 700 points higher at 61,311.02 against the previous close of 60,613.70 and leapt 1,227 points to its 52-week high of 61,840.97.
Nifty also hit its 52-week high of 18,362.30 in intraday trade.
Sensex closed 1,181 points, or 1.95%, higher at 61,795.04 while the Nifty50 closed at 18,349.70, up 322 points, or 1.78%.
The overall market capitalisation of BSE-listed firms rose to 284.5 lakh crore from ₹281.6 lakh crore in the previous session, making investors richer by ₹2.9 lakh crore in a single session.
Mid and smallcaps underperformed. The BSE Midcap index closed with a slim gain of 0.15% while the Smallcap index rose 0.33%.
"Global markets witnessed a rally, as the US CPI print softened and possibly enhanced hopes of some moderation in future rate hikes by the central banks. The US 10-year treasury yield also softened post US inflation coming in weaker than expected," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, observed.
Shares of HDFC, HDFC Bank, Infosys, Tech Mahindra, HCL Tech and TCS ended as the top gainers in the Sensex index. On the flip side, Mahindra & Mahindra, SBI, Kotak Mahindra Bank, ICICI Bank and NTPC ended as the top laggards in the Sensex index.
"Q2FY23 earnings performance has been ahead of expectations, driven by bank results. The net FPI flows have been positive this week. Now, as we enter the last few days of the result season, the market focus will gradually shift towards global and domestic macro data points, including inflation, and central banks' action, amongst others," said Chouhan.
Among the sectoral indices, BSE IT jumped 3.70%, followed by the Teck index which jumped 3.21% and the BSE Metal index which jumped 2.27%. Financial Services (up 1.81%), Realty (up 1.71%), Energy (up 1.29%) and Oil & Gas (up 1.17%) also clocked healthy gains.
Crude oil prices rose but Brent Crude remained below the $95 a barrel mark. The rupee jumped 1.22%, or 100 paise, to close at 80.81 per dollar after the greenback registered its biggest drop since late 2015.
Technical views by experts
Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities pointed out that the Nifty not only cleared the short-term resistance of 18,300 but closed above the same which is broadly positive.
"A bullish candle on daily and weekly charts and range breakout formation is indicating further upside from the current levels. For traders,18,200-18,150 would act as key support zones. If the index trades above the same then it could move to 18,500-18,600. However, below 18,150, the uptrend would be vulnerable," said Athawale.
Apurva Sheth, Head of Market Perspectives, Samco Securities observed that Nifty created a bullish candle on the weekly chart, maintaining its previous bullish trend. The RSI of the weekly trend oscillator is above the corresponding reference lines, suggesting a positive bias.
"Nifty may see bullishness if it maintains above the 18,300 level, which would take the index up to the 18,600 level. If the index falls below 18,000, profit-taking will begin at 17,800, followed by 17,650," said Sheth.
Key market data
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of MintGenie.