Sensex surges nearly 850 pts in early trade; Nifty breaches 17,000-level on global cues

@the_news_21

Equity benchmark Sensex jumped nearly 850 points in opening trade on Thursday, following a strong rally in global equities after the US Fed raised interest rates.

Besides, fresh foreign fund inflows and softening crude oil prices also helped domestic equities, traders said.

The 30-share Sensex was trading 846.31 points or 1.49 per cent higher at 57,662.96, and the broader Nifty advanced 236.80 points or 1.39 per cent to 17,212.15.

All the constituents of the Sensex were in the green. HDFC was the top gainer in the Sensex pack, climbing 3.14 per cent, followed by Axis Bank, Asian Paints, Kotak Bank, IndusInd Bank, HDFC Bank, ICICI Bank and Bajaj Finance.

In the previous session, the 30-share index surged 1,039.80 points or 1.86 per cent to finish at 56,816.65. Likewise, the broader NSE Nifty jumped 312.35 points or 1.87 per cent to 16,975.35.

Bourses in Hong Kong, Seoul and Tokyo rallied in mid-session deals, while Shanghai was in the red.

Stock exchanges in the US closed with significant gains in the overnight session after the US Federal Reserve raised interest rates, marking the first hike since 2018. The Fed also indicated that more hikes would be needed to fight inflation.

The US central bank on Wednesday approved a 0.25 percentage point increase in interest rates.

International oil benchmark Brent crude rose 0.86 per cent to USD 98.86 per barrel.

“The Fed raising rates by 25 bp was on lines of market expectations. Fed’s projections of another six hikes this year is hawkish and, therefore, the smart rally in markets with S&P 500 and Nasdaq posting 2.24 per cent and 3.17 per cent upmoves respectively was a bit unexpected,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Vijayakumar said the market was oversold and the consequent short-covering pushed indices higher. The market drew confidence from the Fed chief Powel’s statement that “the American economy is very strong and well positioned to handle tighter monetary policy”.

He further noted that short-covering in India, too, will lift markets on Thursday.

“FPIs turning buyers after a long time and softness in crude will support the market. There is upward potential in financials, particularly in high quality private banks in which FPIs were sustained sellers,” he said.

Foreign institutional investors emerged as net buyers after they bought shares worth Rs 311.99 crore on Wednesday, as per exchange data.

Meanwhile, the Russian forces continued strikes against Ukraine on Wednesday, even as the two countries expressed optimism over efforts to negotiate a resolution to end the conflict.