SENSEX, NIFTY50 jump 1%: 5 reasons why market is surging today

The National Stock Exchange benchmark NIFTY50 was on track to close higher after a long run of losses on Wednesday. The SENSEX rose as much as 943.87 points to hit an intraday high of 73,933.80 and NIFTY50 index climbed as much as 312 points to hit an intraday high of 22,394.90. As of 1:45 pm, the SENSEX traded 676 points higher 73,666 and the NIFTY50 index advanced 234 points to 22,316.

Trump may roll back some tariffs

United States Secretary of Commerce Howard Lutnick on Tuesday hinted that President Donald Trump could consider some tariff relief for Canada and Mexico.

He said that the President is going to "figure out" which would involve reducing some of the 25% tariffs on imports from Canada and Mexico.

In an interview with Fox Business, Lutnick said, "Both the Mexicans and the Canadians were on the phone with me all day today trying to show that they'll do better, and the president's listening, because you know he's very, very fair and very reasonable."

Services PMI shows uptick

India's services sector activity picked up momentum in February as indicated purchasing managers index (PMI) data released by the HSBC India Services. Services PMI in February rose to 59 from 56.5 in the previous month.

"The seasonally adjusted HSBC India Services PMI Business Activity Index – based on a single question asking how the level of business activity compares with the situation the month before – rose from January's 26-month low of 56.5 to 59.0 in February, indicating a sharp rate of expansion that was well above its long-run average," S&P Global said in a press release.

Productivity gains, favourable underlying demand and greater intakes of new business were the key determinants of output growth, anecdotal evidence showed, S&P Global said.

Surge in IT stocks

Gains in Wednesday's session was led by a surge in information technology shares. The Nifty Mid Small IT and Telecom index rose over 4% while the Nifty IT index advanced over 2% after reports suggested that President Donald Trump could consider some tariff relief for Canada and Mexico.

All the 20 constituents in the index were trading higher led by Coforge's over 10% surge after the company announced a slew of measures including a stock split in ratio of 1:5 and acquisition of two entities by its subsidiary.

KPIT Tech, Persistent Systems, Cyient, Vodafone Idea and Birlasoft also rose between 3.75-6.2%.

Technical bounce

The benchmarks took support around the 500 day exponential moving average which is placed at 21,917 for NIFTY50 and 72,529 for the SENSEX, analysts said.

Meanwhile, after persistent selling pressure, the markets went into the oversold zone as indicated by the relative strength index (RSI). The RSI for NIFTY50 is currently at 21.8, a reading below 30 indicates that the index is in an oversold territory.

Value buying in bluechip shares and strong breadth

Analysts added that after a long spell of losses value buying has emerged in bluechip stocks as forty five out of 50 shares in the NIFTY50 basket were trading higher led by Adani Ports' 4.75% gain. Power grid, Mahindra & Mahindra, Adani Enterprises, Tata Steel, NTPC and Bharat Electronics also rose between 3.55-4.15%.

On the flipside, Bajaj Finance, HDFC Bank, IndusInd Bank, Grasim and Shriram Finance were the only losers.

The overall market breadth was extremely strong as 3,188 shares were advancing on the BSE while 753 were trading lower on the BSE.