Mid-day Mood | Sensex, Nifty trim gains, trading firm in green; here's what is pushing share market higher

Sensex rose nearly 600 points, broader Nifty surged past 19,150, tracking gains in global markets.

Bulls took charge on Dalal Street as benchmark Indices Nifty and Sensex jumped nearly 1 percent on November 2 as markets cheered US Fed's decision to keep interest rate steady. Risk-off sentiment in domestic equities eased as Fed Chair Jerome Powell hinted that the US central bank may now be finished with the most aggressive tightening cycle in four decades.

At 12:15 pm, the Sensex was up 301.99 points or 0.47 percent at 63,893.32, and the Nifty was up 94.20 points or 0.50 percent at 19,083.40.
About 2002 shares advanced, 1070 declined, and 116 were unchanged.

The Fed chief Jerome Powell’s comment that “despite elevated inflation, the longer-term inflation expectations remain well anchored” was taken by the market as a slightly dovish statement. Consequently, the bond yields declined sharply, and markets responded positively, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Here's what is pulling markets up

Global Markets

Jerome Powell’s dovish pivot cheered US markets, with the S&P 500 index closing over 1 percent higher, briefly crossing its 200-day moving average on November 1. The Dow Jones Industrial Average rose 0.67 percent, and the Nasdaq Composite added 1.64 percent. Meanwhile, In Australia, the S&P/ASX 200 rose 1.20 percent, edging close to its highest level in nearly two weeks.

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Most Asian stocks rose as well, buoyed by a rally in the technology sector. Japan’s Nikkei 225 added 1.2 percent, extending gains into a third straight session after the Bank of Japan struck a less hawkish tone than expected. South Korea’s Kospi gained nearly 2 percent, and Hong Kong’s Hang Seng index gained 1.43 percent at open.

Bond Yields

The 10-year US Treasury yield tumbled below 4.75 percent for the first time in two weeks, extending moves initially triggered in the morning by the Treasury Department’s plans to slow the pace of increase in its long-term debt sales.

In the near-term, the dollar index at 106.3, Brent crude at around $85 and the 10-year US bond yield at 4.75 percent are favourable for stock markets.

Rupee strengthens

The Indian rupee rose 8 paise to $83.20 against the US dollar in early trade on November 2. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.5 percent to 106.34 level.

Nifty technical view

"On the immediate basis, Nifty has a strong resistance at 19,200 whereas support at 18,800, hence the range for the weekly expiry is 18,800-19,200," said Jay Thakkar, Head - Alternate Research, Capital Market Strategy at Sharekhan by BNP Paribas.

"The Bank Nifty has a strong resistance at 43,000 and support at 42,500 and thereafter at 42,000 levels. The bounce which had come recently is to be treated as a dead cat bounce," he added.

What should investors do?

"There is a possibility that the FIIs who were sustained sellers in October may turn buyers and if that happens, short-covering can take markets higher despite the uncertainty surrounding the Israel-Hamas conflict. From the valuation and growth perspective, leading banks provide good buying opportunities. IT can stage a comeback," Vijayakumar added.

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.