The market became a rocket
Wednesday, 26th November was a very good day for the Indian stock market. The atmosphere of laziness and decline that had prevailed in the market for the last three days suddenly turned into a strong stormy boom today. There was such a strong influx of buyers in the market right from the morning that by the end of the day Sensex and Nifty filled the bags of investors with happiness.
The nature of today’s boom was such that investors earned about Rs 6 lakh crore in just a few hours of trading. The total market cap of companies listed on the Bombay Stock Exchange (BSE), which was Rs 469 lakh crore on Tuesday, increased today to almost Rs 475 lakh crore. This figure clearly shows that risk appetite has returned in the market and investors are once again expressing confidence in the Indian economy.
Eradicating all its previous fatigue, the Sensex made a tremendous jump of 1,023 points and closed at the level of 85,609.51 with a gain of 1.21%. At the same time, Nifty 50 also did not lag behind and reached the level of 26,205.30 with a gain of 321 points.
Why did the market suddenly become a rocket?
This sudden rise in the market certainly surprised many people, but there were some concrete reasons behind it. The biggest reason was ‘short covering’. After the recent fall, the market got a chance to recover and traders covered their selling positions.
According to Ajit Mishra, SVP, Research, Religare Broking, this rally has been fueled by both domestic and global cues.
- Expectations from US Fed and RBI: The discussion is gaining momentum in the market that the US Federal Reserve may cut interest rates in December. At the same time, there is hope at the domestic level that the Reserve Bank of India (RBI) can cut the repo rate by 25 basis points next month. This expectation breathed life into banking and realty stocks.
- Softening on Russia-Ukraine war: There are signs of geopolitical tension reducing at the global level. Hopes of peace between Russia and Ukraine have brought down the prices of crude oil, which is a big relief news for an oil importing country like India.
- Domestic Macro Economy: India’s strong economic data also gave confidence to foreign and domestic investors that it is beneficial to remain in the market for the long term.
Which stocks performed well and which were left behind?
Today’s boom was not limited to any one sector, rather it was the result of ‘broad-based buying’. Midcap and smallcap indices also closed with gains of more than 1.25 per cent, which shows that a lot of money has been invested in small and medium stocks also. 44 out of 50 stocks of Nifty 50 closed in the green.
- Top Gainers: JSW Steel jumped the most by 3.69%. This was followed by HDFC Life and Bajaj Finserv, which showed a strength of more than 2.5%.
- Record in Banking Sector: Nifty Bank Index touched its historical level today and made a record high of 59,554.95. Finally it closed with a gain of 1.20%.
- Declining shares: Despite such a rise, profit booking dominated in some shares. Bharti Airtel witnessed a decline of 1.60%, while Adani Enterprises and Eicher Motors also closed in the red.
Will this boom continue or will there be a U-turn?
Now the question in the mind of the common investor is whether this boom will continue tomorrow also? Market experts believe that the sentiment has become positive, but it is necessary to be cautious at the upper levels.
Ravi Singh of Master Capital Services says that Nifty crossing 26,000 shows that the risk appetite in the market has increased. However, there may be profit booking from time to time, which should be considered good for the health of the market.
From a technical point of view, Sudeep Shah of SBI Securities believes that now the level of 26,27026,300 can act as a resistance for Nifty. If the market crosses this, we may soon see 26,500 and 26,700 levels. At the same time, on the downside the level of 26,000 has become a strong support.
The advice of experts is clear, the trend of the market is now ‘Buy on Dips’ i.e. buying on decline. As long as Nifty remains above 25,800, there is no need to panic, but while investing, choose only stocks with good fundamentals.