Indian Markets Rally Following Global Surge

Indian markets opened on a high note on Friday, driven by a global stock market rally. Nifty 50 and Sensex indices registered gains at the start of trading. Market experts attribute this surge to deflationary trends and improved unemployment figures in the US, alongside reduced geopolitical risks.

Indian markets opened with gains on Friday, buoyed by a rally in global stock markets. Both benchmark indices, Nifty 50 and Sensex, saw significant increases. The Nifty 50 index surged 0.79%, or 191 points, to reach 24,334.85 at the opening session, while the BSE Sensex gained 646 points, or 0.82%, to open at 79,751.90 points.

Markets worldwide have rebounded smartly from the August 5 sell-off, which was caused by US recession fears and the unwinding of Yen carry trades. According to recent data on US inflation and unemployment, there is no indication of an impending recession. "Strong global cues are supporting Indian markets. Of the three global risks at the start of the week, all three have diminished considerably. Diplomacy has prevented an Iran attack on Israel, and US CPI and PPI numbers underscore a deflationary trend, while lower unemployment claims enhance the likelihood of a soft landing in the US economy," said Ajay Bagga, a Banking and Market Expert.

Bagga also noted that for India, continued FPI (Foreign Portfolio Investment) selling has withdrawn nearly $2.8 billion from the cash equities segment this month. Sideways markets have entered a consolidation phase and may be positioned for another attempt at all-time highs over the next week. In broader market indices, Nifty Midcap 50, Nifty Small Cap 100, and Nifty Micro Cap 250 indices surged by more than 1% during the opening session.

Leading the gains among sectoral indices were Nifty Auto, Nifty Media, and Nifty IT, all surging more than 1%. Nifty Bank also gained 0.91%. Among Nifty 50 stocks, 46 stocks advanced while 4 stocks declined at the time of this report.

"Real strength may emerge if indices manage to close above the level of 24500/80000, potentially pushing the market up to 24900/81200 levels. Our advice is to reduce weak long positions until the market trades above 24500 levels. Bank-Nifty is sustaining above the 50-day SMA (simple moving average) level but is struggling to surpass the 50500 level. It is expected to remain range-bound until it crosses that threshold," said Shrikant Chauhan, Head of Equity Research at Kotak Securities. Asian markets also rallied, with Japan's Nikkei 225 index surging around 3% to 37,800 points and Hong Kong's Hang Seng index rising more than 1.70%. Taiwan's Taiwan Weighted index gained 1.95%, and South Korea's KOSPI surged 1.75%.

In the US markets, the S&P 500 surged by 1.61% while the Nasdaq rallied with a gain of 2.34% on Thursday. On Wednesday, domestic indices ended a volatile session on a positive note. The Sensex rose by 149.85 points, or 0.19%, to close at 79,105.88, while the Nifty 50 edged up by 4.75 points, or 0.02%, to close at 24,143.75. The Indian stock market was closed on Thursday for Independence Day 2024. (ANI)

(With inputs from agencies.)