Sensex Rises Over 150 Points, Nifty Reclaims 8,000: 10 Developments

The BSE Sensex and Nifty rose on Friday but ended well off their intra-day highs. The Sensex ended 161 points higher at 26,392 while Nifty settled above the psychologically important level of 8000. At its day's high, the Sensex rose over 450 points to 26,687.33 while Nifty hit 8,091.

Here are top 10 developments:

1) The gains in Indian stock markets follow gains in other global markets after upbeat US economic data calmed sentiment. Markets around the world plunged earlier in this week as a slump in Shanghai shares fueled worries over China's economic health, but some calm returned after Beijing rolled out strong policy easing steps late on Tuesday.

2) For the week, the Sensex lost nearly 3.5 per cent which was its biggest decline in three months. On Monday, the Sensex slumped over 1600 points - its biggest loss ever in terms of absolute value.

3) China stocks rose for the second day, with Shanghai Composite surging nearly 5 per cent. Japan's central bank governor Haruhiko Kuroda earlier this week said market players had become "too pessimistic" about China, and he expected its growth would likely remain at 6-7 per cent this year and next.

4) Wall Street rose sharply on Thursday following revised US gross domestic product data showing the economy grew faster than initially thought in the second quarter. The Dow Jones industrial average on Thursday scored its biggest two-day percentage gain since 2008. The Dow rose 2.3 per cent or 370 points, extending its two-day gain to 6.3 per cent.

5) However, the strong US GDP has again raised the possibility of the Federal Reserve raising its interest rate next month. A rate hike from the US could trigger outflows from emerging markets, leading to more turmoil in global financial markets.

6) Esther George, a Fed official, said in an interview that "we have to be careful... trying to decide today how we might react to" recent financial market volatility. Her comments followed New York Federal Reserve President William Dudley's remarks on Wednesday that the prospect of a September rate hike "seems less compelling to me than it was a few weeks ago" in light of the global market volatility.

7) Coming back to Indian markets, analysts however say that unless selling pressure from foreign institutional investors abates, the gains in Indian markets may remain capped. Foreign institutional investors hold nearly 25 per cent of BSE 200 stocks.

8) Foreign investors sold Indian shares worth Rs 3,347 crore on Thursday. In the past seven sessions, they sold Indian shares worth nearly Rs 16,500 crore. In contrast, domestic investors bought stocks worth Rs 2,577 crore on Thursday. They have been big buyers of Indian stocks in the past few days, offering support to Sensex and Nifty.

9) Market analysts say Indian stocks may consolidate in the next few days. Market analyst Ambareesh Baliga said that investors who missed the recent dips to invest should wait for a possible consolidation to put in fresh money. "7800 to 8000 levels remain a good value to put in fresh money," he said.

10) The rupee traded in a narrow range of 66.02 to 66.20 per dollar today. Yesterday, it had closed at 66.04.