Market Rebound,Sensex Gains 2,303 Pts, Nifty above 22,600 in Major Market Rally

Ira Singh
Khabar Khabaron Ki,05 June’24

The domestic share market indices rose over 3 percent on Wednesday,driven by value buying after both benchmarks fell nearly 6 percent in the previous session,after two key allies pledged their support to form a new government with the BJP, giving investors confidence in political stability and continuity.At close,the Sensex was up 2,303.19 points or 3.20 percent at 74,382.24, and the Nifty was up 735.80 points or 3.36 percent at 22,620.35. About 2348 shares advanced, 1008 shares declined, and 74 shares unchanged.

Indian market exhibited a spirited recovery driven by broad based buying across various sectors, as political stability appears assured. However, attention will remain on the formation of the government and the forthcoming RBI policy meeting. The market does not expect any change in RBI’s policy stance given persistent high food inflation, and an expectation of an increase in government spending, which has led to a notable traction in FMCG stocks.

Highlights of trade:
●Sensex, Nifty rise 2%,
●Hindalco-owned Novelis postpones US IPO,
●Adani Group stocks rise up to 5%,
●Volatility index India VIX eases 30%,
●Auto and FMCG indexes hit 52-week high,
●Nifty Bank sees biggest gain since February 2021.

Except BPCL and L&T, all other BSE Sensex and Nifty50 stocks ended in the green.

On the sectoral front,all the sectoral indices ended on a positive note with Auto, Bank, FMCG, Metal, Telecom and Media up 4-6 percent.The BSE midcap index rose 4 percent while the smallcap index gained 3 percent.

Rupee Close:
On 05 June’24,the Indian rupee appreciated 15 paise to 83.37 against the US dollar on Wednesday, taking cues from domestic equity markets and lower crude oil prices overseas.

Forex traders said the rush for value-buying triggered an uptrend in equity markets, boosting the local currency which saw a steep decline on June 4 after the general elections results showed a less-than-expected majority for the BJP-led NDA.

Trading Guide:
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services reportedly quoted as saying,the market will take some time to absorb the unexpected election results. Stability will return to the market soon but volatility will continue till there is clarity on the cabinet and the key portfolios. A sharp rebound in the market is unlikely in the near term but sectoral preferences might change. Sectors like FMCG, healthcare and IT will find increasing preferences and the momentum plays will slowdown.

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