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Last Updated : Jan 09, 2020 04:12 PM IST | Source: Moneycontrol.com

Sensex rises over 600 points, Nifty over 12,200; 5 factors that are boosting the sentiment

Nearly four shares advanced for every share falling on the National Stock Exchange.


Bulls regained control on the Street on January 9 with the Sensex climbing over 41,000 level and Nifty over its psychological 12,200 level. The rally was across sectors, barring IT, - Nifty Bank, Auto, and Realty indices rose more than 2 percent each.

The BSE Sensex jumped 634.61 points or 1.55 percent to 41,452.35 and the Nifty50 climbed 190.50 points or 1.58 percent to 12,215.90.

The broader market also participated in the rally. The Nifty Midcap index was up 1.4 percent and Smallcap index gained 2.1 percent amid strong breadth.

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Nearly three shares advanced for every share falling on the National Stock Exchange.

Here are 5 factors that lifted market sentiment after a day of consolidation:

Donald Trump's speech

The national address by US President Donald Trump with respect to escalating tensions with Iran indicated that both countries may want to avoid crisis. The Trump's address came hours after Iranian forces fired missiles on US troops housing in Iraqi facilities.

The attack was in retaliation to the American killing of Iranian major general Qassem Soleimani.

While addressing nation, Trump said, "Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world."

"Iran must abandon its nuclear ambitions and end its support for terrorism. The time has come for the United Kingdom, Greece, France, Russia and China to recognise this reality. They must now break away from the remnants of the Iran deal, or JCPOA. And we must all work together towards making a deal with Iran that makes the world a safer and more peaceful place," he added.

He said, "As we continue to evaluate options in response to Iranian aggression, the United States will immediately impose additional punishing economic sanctions on the Iranian regime. These powerful sanctions will remain until Iran changes its behaviour." (With inputs from Reuters)

Global Markets

Asian markets recouped previous day's losses after easing geopolitical tensions between United States and Iran as both sides backed away from the brink of further conflict in the Middle East.

Iran offered no immediate signal it would retaliate further over killing of its senior military commanders, reports Reuters.

Japan's Nikkei gained 2.3 percent while Hong Kong's Hang Seng and South Korea's Kospi were up over 1.6 percent each. China's Shanghai Composite rose 0.9 percent at the time of publishing this copy.

Oil Prices Cooled Off

The cooling off of oil prices after ebbing US-Iran tensions also lifted Indian market sentiment as it is a big relief to the country, which imports more than 85 percent of its oil requirement.

International benchmark Brent crude futures fell 4.1 percent amid volatility in the previous session and traded around $65 a barrel (compared to $68-70 levels seen on January 8) amid a rocket attack on Baghdad which triggered fresh worries over likely conflict in the Middle East.

Pre-Budget

The spectacular rally could also be attributed to pre-budget expectations as the government is readying a set of bold initiatives that will likely be announced in the Budget for 2020-21 which could bring a quick turnaround in the Indian economy.

Top sources in the government said that over the last few days the Prime Minister has been brainstorming over a range of issues affecting the economy and thrash out appropriate policy interventions.

He has held as many as 12 meetings so far with groups of industrialists and experts. Each group has had between 10-12 people each and each meeting has been for three hours and more, in what probably is the most extensive ever consultations that Modi has held on matters related to the Union Budget and the economy in the past five years.

Each ministry has been asked to prepare a five-year vision and the Prime Minister is personally reviewing each plan, going through detailed presentations, sources said.

Technical View

The Nifty50 saw a strong gap-opening and started trading near day's high, forming a bullish candle on daily charts.

Experts feel as the index closes above crucial 12,200 level, it could march towards 12,300 level in coming session.

"Technically, this action indicates a strong comeback of bulls and this pattern seems to have nullified the negative status created by the panic selling of 6th Jan 2020," Nagaraj Shetti – Technical & Derivative Analyst, HDFC Securities said.

"The short term trend of Nifty is positive, there is a possibility of further upside in the next session. The Nifty could encounter the upside resistance of 12,290-12,300 levels in the next 1-2 sessions," he added.

Nifty Bank also showed strong strength as it saw more than 350 points gap-up opening and crossed psychological 32,000 level, forming large bullish candle on daily charts.

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First Published on Jan 9, 2020 12:53 pm
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