Indian equity markets ended the trading week on a strong note as investors cheered a confluence of positive factors. Sensex zoomed 1000 points intraday and closed at 59,808. Meanwhile, while Nifty crossed the psychological 17,500 mark and ended at 17,594.
All sectors ended in the green with metals and financials taking the charge. Adani Enterprises, Adani Ports and State Bank of India were the top index gainers. Action in the broader markets was a bit subdued with Nifty Midcap and Nifty Smallcap indices higher by 0.5 percent.
Apart from a short-covering rally, as expected by analysts, a number of other factors came together for investors to exclaim “Thank God, It’s Friday”.
Take a look:
Adani-GQG deal
US-based investment firm GQG Partners poured in Rs 15,446 crore in four Adani stocks. This has propelled Adani Enterprises higher by 11 percent and Adani Ports by 7 percent.
Also Read: It took 5 years of tracking in 'no-man's territory' for Rajiv Jain to grab a Rs 15k-cr Adani pie
“This money will mainly be used for retiring debt, which means that the banks that had funded Adani companies will not face any stress. This is positive news for Bank Nifty,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
Nifty Bank index ended higher by 2.13 percent and Nifty PSU Bank index was up 5.4 percent.
Fed's green signal
The recent hawkish comments from FOMC minutes had sparked fears of a 50 basis point rate hike in the next meeting.
But on Thursday, Atlanta Federal Reserve President Raphael Bostic said that he thinks the central bank can keep its interest rate hikes to 25 basis points rather than the half-point increase favoured by some other officials.
Also Read: Fed is set to hike rates to 6% or more. Will RBI follow suit?
Wall Street and Asian markets rally
After the comment, Dow Jones notched its best day since February 13 and closed over 340 points higher. The S&P 500 rose 0.76 percent while the Nasdaq climbed 0.73 percent.
Tracking Wall Street cues, Asian markets also gained in early trade on March 3. Hong Kong’s Hang Seng index rose 0.7 percent, while the Hang Seng Tech index gained 1.6 percent. Nikkei zoomed 1.6 percent.
Strong China economic data
Another reason behind the rally in the Asian markets was the strong economic activity witnessed in China. The country's services sector saw a jump in activity, according to the Caixin/S&P Global services purchasing manager’s index, with a reading of 55 in February from 52.9 in January.
This has spurred buying in Indian metal stocks as well. The Nifty Metal index gained over 5.5 percent in the last three sessions.
India second to none
India's services sector posted robust growth in February with the S&P Services PMI hitting a 12-year high of 59.4. Favourable demand conditions led to a strong expansion of services activity in the month coupled with new business gains.
Meanwhile, India’s manufacturing sector expanded at the slowest pace in four months in February amid rising borrowing costs.
That said, Moody’s Investors Service has raised India’s economic growth estimate for 2023 to 5.5 percent from 4.8 percent pegged earlier. This came on the back of a sharp increase in capital expenditure in the Union Budget and a resilient economic momentum.
Also Read: Moody's ups India's growth projection for 2023 to 5.5% on higher capex Budget
With Nifty zooming past 17,500 experts believe bears could soon take a backseat. “Technically for Nifty, a move beyond the 17,621 mark will negate the near-term bearish outlook,” Prashanth Tapse, Senior VP (Research), Mehta Equities said.
But, investors should exercise caution as this could be a one-day wonder. For instance, Sandeep Bhatia, Head of Equity-India and Country Head, Macquarie Group, says that it is still early for investors to consider buying on dips.
"Retail investors should look for buying opportunities once the Nifty 50 slides below 16,800 points," he told CNBC-TV18.
Ajay Srivastava of Dimension Corporate Finance Services believes stocks continue to be very expensive, even as the market is seeing a normalisation. He believes investors should balance their portfolios and get into fixed-income segments.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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