Share market rebounds: What’s driving Sensex and Nifty?
The NSE Nifty 50 index increased 1.08 percent, or 181.60 points, to 17,024.40, while the S&P BSE Sensex increased 1.11 percent, or 624.76 points, to 57,030.60.
On Tuesday, the stock market regained momentum after suffering its worst day in ten months. Gains in IT and consumer stocks have aided the remarkable turnaround, even as global markets remain on edge due to escalating Russia-Ukraine tensions.
NIFTY GAIN, SENSEX
The NSE Nifty 50 index increased 1.08 percent, or 181.60 points, to 17,024.40. While the S&P BSE Sensex increased 1.11 percent, or 624.76 points, to 57,030.60.
Both indexes had fallen 3% in the previous session on Monday.
Broader Asian stock markets were flat after U.S. and European markets fell on Monday. As investors weighed the implications of a potential Russian invasion of Ukraine.
According to Reuters, “people are looking at every opportunity to exit their leveraged positions,” AK Prabhakar. Head of research at IDBI Capital in Mumbai, said, citing headwinds such as geopolitical risks, higher crude oil prices, and looming U.S. interest rate hikes.
“People aren’t making money now that the momentum has faded. Investors want to get out of their leveraged positions as interest rates rise and foreign funds sell.
“In volatile markets, shares of defensive IT and fast-moving consumer goods companies gained traction. However, individual stocks fell 4.5 percent after Cipla’s promoter group sold a 2.5 percent stake in the company, while Manappuram Finance fell more than 10% on lower quarterly profit.
“Markets are currently unfavorable for stock holdings, with prices trading below their 50- and 200-day moving averages. So rather than taking risks, it is better to protect capital by staying on the sidelines. Analysts at William O Neil India stated in a note.
Meanwhile, BofA Securities reduced its December 2022 Nifty target from 19,100 to 17,000. Predicting that the market’s breadth would narrow and volatility would rise.
