What’s Driving the Sensex Up by 335 Points While Nifty Surpasses 24,500?
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Synopsis
The Indian stock market began the week on a high note, led by IT and public sector bank stocks. What factors are influencing this bullish trend? Analysts point to key economic indicators and global developments, sparking interest in future market movements.
Key Takeaways
- Sensex gained 335 points, reaching 80,144.
- Nifty 50 increased by 104.30 points to 24,531.
- The Nifty IT Index was the top sector performer, up 1.59%.
- Foreign investors withdrew Rs 34,993 crore from Indian stocks in August.
- China, India, and Russia's unified response to US tariffs is noteworthy.
Mumbai, Sep 1 (NationPress) The Indian benchmark indices kicked off the week on a positive note on Monday, with IT and public sector bank stocks spearheading the early rally.
Market sentiment was lifted by a US court's decision, which ruled that President Donald Trump's tariffs were largely illegal but allowed them to remain in effect until mid-October, alongside better-than-expected GDP growth data for the June quarter.
The Sensex climbed by 335 points, reflecting a gain of 0.42 percent, reaching 80,144, while the Nifty 50 saw an increase of 104.30 points, or 0.43 percent, to settle at 24,531.
The broad-cap indices outperformed the benchmarks, with the Nifty Midcap 100 advancing by 0.85 percent and the Nifty Smallcap 100 rising by 0.70 percent.
Among the sectoral indices, the Nifty IT Index stood out as the top performer, escalating by 1.59 percent. The Nifty Consumer Durables also saw a rise of 0.98 percent, while the Nifty Metal and PSU Bank indices increased by 0.78 and 0.79 percent, respectively. Conversely, the Nifty FMCG Index was the only laggard, retreating by 0.24 percent.
Leading the Nifty pack were gainers such as Tech Mahindra, TCS, Hero Motocorp, HCL Tech, and Trent. On the flip side, the top laggards included Jio Financial, which dropped by 1.14 percent, followed by Reliance, HUL, Maruti Suzuki, and Tata Consumer Products.
According to Mandar Bhojane from Choice Broking, "The Nifty 50 is currently trading below its 100-day exponential moving average, indicating a weak trend with potential risks of further declines if it drops below 24,350. Key support levels stand at 24,350 and 24,150, while resistance is observed between 24,600 and 24,800."
Analysts are also monitoring the unified response from China, India, and Russia to Trump's tariffs, which could reshape global trade dynamics.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd., noted that the US court's ruling on Trump's tariffs represents a significant development, making the upcoming Supreme Court decision critical.
"Domestically, India's Q1 GDP growth rate of 7.8 percent exceeded expectations. This suggests that the fiscal stimulus from the budget and the monetary policy from the MPC are taking effect with a delay. Proposed GST reforms may further boost growth in the upcoming quarters," he stated.
On the international front, the US markets closed in the negative territory on Friday, with the Dow Jones Industrial Average falling by 0.2 percent, the Nasdaq declining by 1.15 percent, and the S&P 500 losing 0.64 percent.
Asian markets began the week on a mixed note. The Shanghai index in China rose by 0.48 percent, and the Shenzhen index increased by 0.52 percent. Conversely, Japan's Nikkei slipped by 2.03 percent, while Hong Kong's Hang Seng Index surged by 2.02 percent. South Korea's Kospi experienced a decline of 0.83 percent.
In August, foreign institutional investors (FIIs) withdrew Rs 34,993 crore from Indian stocks, marking their most substantial retreat this year, as sentiment was influenced by US tariff shocks and disappointing June-quarter earnings.
Point of View
I observe that the current rise in the Indian stock market is a reflection of both domestic economic resilience and international developments. While the gains are encouraging, investors should remain vigilant to potential volatility, emphasizing the importance of informed decision-making in these dynamic times.
NationPress
01/09/2025
Frequently Asked Questions
What factors contributed to the rise in Sensex and Nifty?
The rise in Sensex and Nifty can be attributed to the strong performance of IT and public sector bank stocks, along with positive market sentiment driven by a US court ruling on tariffs and better-than-expected GDP growth.
What are the key support and resistance levels for Nifty?
Key support levels for Nifty are at 24,350 and 24,150, while resistance levels are observed between 24,600 and 24,800.
How did global markets perform recently?
US markets closed negatively, with the Dow Jones down by 0.2%, Nasdaq by 1.15%, and S&P 500 by 0.64%. Asian markets opened mixed, with some indices rising while others fell.
