SENSEX surges over 950 points, NIFTY50 reclaims 23,200: 5 reasons why markets are soaring today

The Indian equity benchmarks were on track to close higher for fourth straight session on Thursday, March 20. The 30-share SENSEX rose as much as 967 points to hit an intraday high of 76,416.38 and NIFTY50 index reclaimed its important psychological level of 23,200 powered by gains in index heavyweights like Bharti Airtel, Infosys, Tata Consultancy Services, HDFC Bank and Reliance Industries.

Strong closing of US markets and Fed's pause

The Wall Street ended sharply higher on Wednesday leading to surge in Asian peers after the US Federal Reserve kept the interest rates unchanged and signalled that it expects to cut rates twice this year even as it sees inflation staying elevated. The Dow Jones rose 0.92%, S&P500 climbed 1.08% and tech heavy Nasdaq advanced 1.41%.

Following a surge in Wall Street most of the Asian markets were trading higher led by Australia's S&P/ASX200 index's 1.2% gain. Japan's Nikkei rose 0.20%, Taiwan Weighted advanced 0.69% and South Korea's KOSPI gained 0.32%. While, Chinese stocks declined on account of profit booking.

Pace of FII selling abating

The pace of selling by foreign institutional investors seems to be abating as they purchased Indian equities for first time in a month on Tuesday. As per data from the National Stock Exchange, FIIs bought shares worth ₹695 crore on Tuesday and followed it up by buying stocks worth ₹710 crore on Wednesday.

Despite turning net buyers, FIIs, have so far this month sold shares worth ₹33,869 crore, as per data compiled by the National Securities Depository Limited (NSDL).

Buying in IT shares

Information technology shares, which have a significant weightage in the NIFTY50 and SENSEX indices, were witnessing strong buying interest after the US Fed signalled two rate cuts going ahead.

The measure of IT stocks on the National Stock Exchange, NIFTY IT index, was among the top sectoral gainers, the index advanced nearly 1.6% with nine out of 10 stocks, in the index, trading higher led by HCL Technology's 2% gain. Tata Consultancy Services, Infosys, Tech Mahindra, Mphasis and Wipro also rose between 1.2-2%.

Indian IT companies earn a significant revenue from US and with Fed hinting at two rate hikes analyst expect the discretionary spending to revive in US which is a positive development for IT companies.

Broader markets outperform

Broader markets which have been underperforming for quite some time were witnessing buying interest for fourth straight session as NIFTY Midcap 100 and NIFTY Smallcap 100 indices rose nearly 0.6% in trade on Thursday. In the last four trading session, NIFTY Smallcap 100 index has advanced 6.31% and NIFTY Midcap 100 index has risen 6.2%, data from the National Stock Exchange showed.

NIFTY500, NIFTY200 and NIFTY100 indices were also trading higher by 0.7% each.

Sectoral picture and top gainers and losers

Buying was visible across board as all the major sector gauges compiled by the National Stock Exchange were trading higher led by NIFTY IT index's 1.6% gain. Auto, FMCG, Metal, Realty, Pharma and OIL & Gas indices also rose over 1% each.

Market breadth was extremely positive as 41 out of 50 shares in the NIFTY50 were trading higher led by Titan's 3.6% gain. Eicher Motors (2.95%), Bharti Airtel (2.94%), Hero MotoCorp (2.57%) and Bajaj Auto (2.54%) were also among the gainers.

On the flipside, Bajaj Finance, UltraTech Cement, IndusInd Bank, Larsen & Toubro and Apollo Hospitals were among the notable losers.

The overall market breadth was positive as 2,498 shares were advancing on the BSE while 1,371 were declining.