BSE Sensex and Nifty surged nearly 1.5 per cent on Monday, tracking a broad rally in Asian markets. The Sensex surged as much as 417 points while Nifty edged above 8,050 levels. The rupee surged to 65.21/dollar, its highest level in over a month.
Here Are Top 10 Developments:
1) A lower-than-estimated jobs addition in the US has added to expectation that the Fed may refrain from raising key interest rates this year, fueling a rally in global markets. The US jobs data for September was released on Friday. The possibility of the Fed delaying the lift-off date for rates also meant its loose policy, which has helped shore up stock markets globally by providing cheap cash, would continue a little longer.
2) Sanjeev Prasad, senior co-head of Kotak Institutional Equities, attributed the gains in Indian markets to a relief rally on hopes that the global central banks' accommodative stance will continue for more time. He does not expect the US Fed to hike rates this year.
3) Analysts say that the undertone of domestic markets remains positive after the bigger-than-expected rate cut from the Reserve Bank of India last week. RBI chief Raghuram Rajan has also signaled that central bank will be accommodative to the extent possible.
4) Analysts say that 8,100 remains an initial hurdle for Nifty and once it goes past this level, the benchmark index could rise to 8,250-8300 levels, if the global cues remain supportive.
5) The gains are broad-based today with all the sectoral indices trading firmly in the green. The BSE midcap and smallcap indices also rose nearly 1.4 per cent.
6) Banking and capital gains stocks led the gains today with their sectoral indices Bank Nifty and BSE Capital Goods Index rising nearly 2 per cent. Among banking stocks, State Bank of India, Bank of Baroda and ICICI Bank were up 2-3 per cent while L&T rose 2.3 per cent. Citi has upgraded L&T "buy" from "neutral" with target price of Rs 1746/share.
7) Banking stocks outperformed after Press Trust of India reported that Cabinet is likely to consider this week a proposal to recast Rs 4.3 lakh crore loans of nine state power distribution companies with a view to bring down their liabilities.
8) Shares of Tata Motors surged over 6 per cent after its luxury car division JLR reported a 61 per cent surge in US sales in September to 6,850 units. Maruti Suzuki shares fell nearly 4 per cent. Traders cited a downgrade by global investment bank Jefferies for the selloff in Maruti shares. Jefferies downgraded Maruti Suzuki to "underperform" from "buy" and cut its target price on the stock by nearly 20 per cent to Rs 3,952.
9) Analysts would be closely tracking the activity of foreign investors who sold Indian shares worth nearly Rs 5,500 crore last month. However, strong buying from domestic institutional buyers helped to support markets.
10) Japan's Nikkei was up over 1.7 per cent, leading a broad-based rally in Asian markets, amid speculation the US Federal Reserve will keep interest rates near zero for longer and an economic downturn will force Japanese policymakers to increase stimulus.