Bulls roar on D Street; Why is the market going up
Major benchmark indexes rose nearly 2 percent in morning trades on Monday, driven by strong global momentum. The S&P BSE Sensex rose more than 950 points to quote at 55,863, while the Nifty50 advanced 284 points to 16,636. Indian shares saw their market capitalization rise by Rs 4.4 crore as investors on Dalal Street tracked the rally in US stocks on Friday amid inflation hopes to reach Its climax is near.
According to analysts, domestic investors from China were inspired by the easing of Covid restrictions and the minutes of the US Federal Reserve meeting from the early May meeting released on Wednesday that led to speculation about a possible pause in interest rate hikes later this year after further monetary measures in June and July . “The market is poised for a near-term recovery,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. The sharp rally in the Nasdaq and S&P 500 late last week suggests a near-term trend reversal.”
Here are the factors fueling the stock market rally today-
Deepak Jasani, Head of Retail Research, HDFC Securities, “Indian markets rose for a third consecutive session on May 30 after positive global signals due to China easing Covid restrictions and sharp gains on Friday on Wall Street. Some of the local factors helping the mood include the early arrival of winds The monsoons in Kerala raised hopes of a positive impact on agricultural crops. Stocks anyway were due to rebound after continued underperformance since early April 2022. It may be difficult to break through 16800-16850 on Nifty in the near term.”
1) US markets rise
US stocks enjoyed a broad-based rally on Friday, while the yield on benchmark US Treasuries fell after data showed that US consumer spending rose in April and the rise in inflation slowed, two signs that the world’s largest economy may be on track for growth this quarter. . The Dow Jones Industrial Average rose 575.77 points, or 1.76 percent, to 33,212.96, the Standard & Poor’s 500 rose 100.4 points, or 2.47 percent, to 4,158.24 points, and the Nasdaq Composite increased 390.48 points, or 3.33 percent, to 12,131.13.
2) Asian stocks remain higher
Asian shares traded higher after China eased COVID restrictions in Shanghai and Beijing and introduced a slew of economic support measures. Shanghai will ease Covid testing requirements for people entering public places and Beijing will ease movement restrictions in several regions from Sunday after authorities said the outbreak was under control. The Nikkei Index is up two percent, the Hang Seng Index is up 1.9 percent, the CSI 300 Index is up 0.5 percent, and the Taiwan and Kospi Index is up 1.7 percent and 1.4 percent, respectively.
3) China relaxes Covid restrictions
Asian shares traded higher after China eased COVID restrictions in Shanghai and Beijing and introduced a slew of economic support measures. Shanghai will ease Covid testing requirements for people entering public places and Beijing will ease movement restrictions in several regions from Sunday after authorities said the outbreak was under control. The Nikkei Index is up two percent, the Hang Seng Index is up 1.9 percent, the CSI 300 Index is up 0.5 percent, and the Taiwan and Kospi Index is up 1.7 percent and 1.4 percent, respectively.
4) Purchase at heavy weight
Five stocks namely HDFC duo and major IT companies Infosys, TCS and Reliance Industries alone contributed more than 550 points positively to Sensex’s rally. Bargain hunting and the recent drop in the rupee are boosting IT stocks that generate a large portion of their revenue from exports.
Investors are also awaiting the March quarter GDP data, which is due for release on May 31. Analysts have a wide range of growth forecasts from 2.7 to 4.5 percent for the quarter. The State Bank of India forecasts 2.7 percent growth for the quarter
6) The monsoon arrives early
The Indian Meteorological Department (IMD) said the southwest monsoon set in over Kerala on Sunday, three days before its normal start date on June 1. Analysts believe this is good news for India, which is battling rising inflation. Regular and timely rains can enhance the production of monsoon crops such as rice, soybeans, pulses, etc.
7) Elegant artistic outlook
Anand James of Geojit Financial Services said: “The 16400 wall which rejected at least three bold attempts in the last 30 days, is still resilient, but it will face one of the strongest challenges soon, as the biweekly event also holds an element of positive surprise. The argument Saying that Nifty’s retracement away from just 23 percent of the 2020 Fibonacci retracement loses its voice when compared to the S&P500 that heads higher than the 62 percent Fibonacci, retracement of more than 7 percent, with more room for upside ahead of retracement challenges. Intermediate Surface This encourages us to stick to the 16750 move that started last week, although the default approach is to expect a rejection of trades at 16,415. The downside risk level set at 16,084 last Friday will move up to 16186/51. In fact , there’s no doubt Nifty is poised for a giant move soon. Since you’re at the upper end of the month-old parallel consolidation range, the downsides have a potential of 1,400 points, versus a potential 700 points for highs, as a range and side gauge Nifty will come out of it. However, the next two weeks will be one to take risks.”
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