SENSEX rises over 600 points, NIFTY50 jumps to 23,425 amid weak global cues; here’s why

The benchmark NIFTY50 index surged 0.78% to hit a day’s high of 23,425 points during the trading session on June 10, compared to 23,242 points at the previous stock market close, as per NSE data.

During the afternoon trading hours, SENSEX index rallied nearly 1% to 74,613 points on Wednesday, compared to 73,918 points at the previous market close, according to the exchange data.

Key factors fuelling the stock market today

The stock indices were trading higher during the afternoon session on June 10 backed by the strong buying interest among FMCG stocks, Banking stocks, and other index heavyweight stocks amid a higher value of INR and lower crude oil prices.

Investors were conducting heavy buying in index heavyweight stocks like HDFC Bank, Kotak Mahindra Bank, Nestle India, Hindustan Unilever (HUL), Reliance Industries, ICICI Bank, among several others on Wednesday’s market.

Due to signs of a re-escalating geopolitical conflict in West Asia, investors were shifting to defensive sector stocks, while also trading based on the positive momentum from the higher value of the Indian rupee in the market.

As of 2 pm (IST), the Indian rupee was trading 0.26% stronger against the benchmark US dollar at 95.10 on Wednesday, compared to 95.35 at the previous currency market close, according to Investing.com data.

A stronger rupee helps the import oriented companies, and considering India is a heavily import dependent nation, many companies are likely to gain from the appreciation in Indian rupee against the US greenback.

During the morning market hours, Reliance Industries and HUL shares acted as a key support for the domestic index, at a time when the Asian stock markets were trading flat due to the high risk sentiment.

HUL shares jumped over 3%, while RIL shares gained as much as 2.4% as Facebook’s parent company, Meta announced that it has tied up with Mukesh Ambani’s RIL for an AI-enabled data centre in India. However, since the early market trade, RIL shares have cooled off as of the afternoon session.

The sentiment was also further improved after reports suggest that the Meterological department’s recent prediction on monsoon is to cover more parts of Maharashtra in the next three to four days.

Weak global market cues

Although the indices were witnessing key support from several domestic cues, the concerns in the market remains on the global market sentiment.

Latest reports of a fresh round of military action between the United States and Iran have sparked concerns of further escalations in the market. Any potential escalation is likely to impact the global oil prices and in turn weigh down the equity markets.

The US market benchmark indices, S&P 500 and Nasdaq Composite closed lower after their trading session on Tuesday due to the continued reversal trend in artificial intelligence (AI) and tech stocks. However, Dow Jones ended marginally higher due to value buying in sectors like airlines and consumer staples.

The weak market momentum along with the cautious sentiment in relation to the latest attacks weighed down the Asian equities on Wednesday.