The Sensex surged over 550 points to 73,796 on October 29, while the Nifty crossed 22,847. The market rally was supported by the US Federal Reserve keeping rates at 3.75%-4% and a 3.40% drop in the India VIX.
Domestic equity benchmarks staged a strong recovery on Thursday, October 29, with sustained buying across banking, information technology, and FMCG sectors lifting the broader market sentiment. The rebound follows a weak session on Wednesday, where the Sensex had closed 352.64 points lower and the Nifty 50 had declined 50.90 points to settle at 22,698.85.
A quick read of the trade data showed the rally gathering momentum after a subdued opening. The Sensex rose from around 73,395 at 9:26 am to nearly 73,800 an hour later. By 10:45 am, the Sensex was trading at 73,796.77, rising 550.74 points or 0.75 percent from its previous close of 73,246.03.
The Nifty mirrored this trend, trading at 22,847.35, up 148.50 points or 0.65 percent. Value buying and short covering appeared to drive the initial surge, helping the benchmarks extend their gains through the morning session.
US Federal Reserve rate pause and easing crude oil
The global backdrop provided a supportive environment for domestic equities, primarily driven by the US Federal Reserve’s decision to keep its benchmark interest rate unchanged at 3.75 to 4 percent. While the 10-2 vote highlighted differing views among policymakers regarding persistent inflation, the pause allowed investors to reassess the immediate monetary policy outlook.
Adding to this sentiment, crude oil prices eased in early trade amid hopes of diplomatic efforts in the Middle East. Brent crude traded around $114.50 a barrel, while US West Texas Intermediate crude hovered near $102. Despite the slight relief, elevated oil prices continue to pose risks for India’s import bill and inflationary pressures.
Broad-based buying and declining India VIX
The market rally extended beyond heavyweight stocks, with the Nifty 100 advancing 0.62 per cent and the Nifty 500 gaining 0.53 per cent. The Nifty Midcap 100 rose 0.47 per cent, and the Nifty Smallcap 100 climbed 0.62 per cent, though the Nifty Smallcap 250 remained nearly unchanged.
Meanwhile, the India VIX declined 3.40 per cent to 15.69 from its previous close of 16.25. This drop in the volatility index indicates lower market-implied expectations of near-term turbulence, supporting the steady upward movement in equities.