Markets rise for 3rd day on global cues

Mumbai: Indian benchmark indices rose for the third straight session on retail sales and DII buying, which was hit by US treasury yields and a falling dollar, reigniting risk sentiment in global financial markets, which some analysts say that could be the beginning. Santa Claus rally soon. The main risk for the reversal from lows is the expansion of the West Asian conflict, which could put up the global market rally, say veterans in the market.

The Nifty and Sensex gained nine-tenths of a percent each at 19,411.75 and 64,958.69 while the small cap Nifty 250 jumped 1.07% to 12,384.35 and the Nifty Midcap 150 rose 0.9% to 175,953.

While FPIs sold temporarily 549 crore, net of purchased DIIs 595.7 crore, suggesting that direct retail investors also participated significantly in Monday’s Rally.

Sentiment turned after November 1 when the Fed kept its key interest rate unchanged for the second time since September, having raised it from close to zero last March to 5.25% through July this year.

The US 10-year treasury slipped from 4.73% on November 1 to 4.59% intraday on November 6 and a dollar index that measures the dollar against a basket of six currencies fell 1.85% to 104.90 intraday on November 6 over the same period. “Indian markets are being driven by risk on global markets after a dovish pause at the Fed, boosted by weak jobs data in October, which could well be the start of an early Santa Claus rally, ” said Andrew Holland, CEO, Avendus Capital Public Markets Alternative Strategies “The weak jobs report puts pressure on the Fed to hike again in December and raises expectations for interest rate cuts next year, which “The markets could start to price in. equities and bonds, which we’re seeing in India, too.”

FPIs sold value shares 24,548 crore last month , the most in nine months and raised net cumulative bearish bets on index futures to a near all-time high of 175,698 on November 2, the most since 196,378 contracts were sold they on March 22. To be sure, they cut the shorts to 162,694 contracts on November 3rd. NSE had not uploaded the data for November 6 till press time. Additional short covering could push the market higher.

Of all the broader market indices, the Nifty Smallcap 250 outperformed the benchmark by falling just 1.64% from an all-time high of 12590.45 on 18 October to 12384.35 on 6 November. This contrasts with the Nifty’s 4% fall from its all-time high of 20222.45 on September 15 to 19411.75 on Monday and the Nifty Midcap 150’s fall of 4.14% from its all-time high of 15599.05 on September 15 to 14954 with recently.

BSE led the Smallcap index’s outperformance, rising 26% between October 18 and November 6 to 1863.25. Other gains of between 22 and 25% were Angel One, Jindal Saw, Suzlon Energy and CreditAccess Grameen.

“Smallcap outperformance may continue but I expect the bounce in Nifty to be limited to another 150-200 points,” said Abhilash Pagaria, head, Nuvama Quantitative & Alternative Research.

Deven Choksey, Managing Director of KR Choksey Shares and Securities, expects the Nifty to be between 18800-20000 in the short term.

In fact, on Monday the Nifty broke the key resistance of 19367, which is the 38.2% Fibonacci as it fell from the all-time high of 20222.45 on 15th September to the low of 18838 on 26th October. the next resistance comes with the 61.8% around 19700.

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Updated: 06 November 2023, 11:01 PM IST

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