Today's stock market update: Sensex and Nifty 50 both surge by more than 1%; an analysis of the factors driving the rise in the Indian stock market.
On Tuesday, August 6, the Indian stock market saw a significant rise, with the Sensex and Nifty 50 both climbing more than one percent in early trading.
Today in the stock market: Following a significant drop of 3 percent, Indian stock market indices—the Sensex and the Nifty 50—made a strong comeback on Tue1234th, climbing more than 1 percent in early trading, despite mixed signals from the market.
The Sensex kicked off the day at 78,981.97, up from its last closing figure of 78,759.40, and surged by more than one percent to reach 79,852.08. Meanwhile, the Nifty 50 began at 24,189.85, compared to its previous close of 24,055.60, and also rose by over one percent, hitting 24,382.60.
The mid and small-cap sectors of the market experienced notable increases, with the BSE Midcap and Smallcap indices both rising by 2 percent.
The total market capitalisation of companies on the BSE increased to almost ₹449 lakh crore, up from approximately ₹442 lakh crore in the last session, resulting in a wealth boost of around ₹7 lakh crore for investors within just thirty minutes of trading.
The India VIX, a measure of market volatility, experienced a significant drop of almost 14 percent after a remarkable 43 percent increase in the prior session. This sharp fluctuation in the fear index highlights the prevailing uncertainty in the market for the upcoming period.
What factors are contributing to the surge in the Indian stock market (Sensex and Nifty 50) today?
The Indian stock market saw a strong resurgence, mirroring the recovery observed in global markets. Japan’s Nikkei index jumped more than 10 percent, and US stock futures rose by almost 1%, buoyed by indications from key central banks that they are ready to act quickly to bolster the economy and financial markets.
The markets experienced a significant downturn in the last session, driven by concerns over a potential recession in the US following disappointing payroll figures for July. However, analysts argue that it’s premature to declare that the largest economy in the world is on the brink of recession. Although there are indications of a slowdown, the US economy does not exhibit any definitive signs of a severe decline.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggests that concerns about a US recession may be exaggerated and somewhat ahead of schedule. He advises investors to remain calm and consider gradually building their positions in quality large-cap stocks.
G. Chokkalingam, the founder and head of research at Equinomics Research Private Ltd., noted that it’s premature to worry about a potential recession in the US economy. He emphasized that there are no definitive indicators suggesting an imminent and drastic downturn.
Analysts highlighted that the main factor contributing to the market crash was the elevated global valuations, except in the Chinese markets. They noted a significant disparity between liquidity levels and market capitalization.
The Indian market experienced a downturn on Monday, causing the Nifty 50 to drop by 4 percent from its peak of 25,078.30. This decline offered some relief in terms of valuations, encouraging investors to seize the opportunity to purchase stocks across different sectors. The medium to long-term perspective for the Indian stock market continues to be positive, fueled by anticipated strong economic growth, a significant influx of domestic retail investors, and the possibility of forthcoming interest rate reductions.
“The bounce from the vicinity of the 50-day SMA (simple moving average) has given us hopes that a recovery is being attempted. The first leg of such a recovery move should aim for 24,389, where a pause is likely, but a second leg to the recovery move could also be expected, which, however, needs a reclaiming of 24,540/24,570 for sustenance. Alternatively, inability to make any headway beyond 24,389 or a premature turn back below 24,119 could signal regrouping of bears,” said Anand James, Chief Market Strategist at Geojit Financial Services.
3 Comments
[…] The Sensex and Nifty 50 have both increased by more than 1% today. An examination of the causes behi… […]
[…] The Sensex and Nifty 50 have both increased by more than 1% today. An examination of the causes behi… […]
[…] The Sensex and Nifty 50 have both increased by more than 1% today. An examination of the causes behi… […]