Sensex Up 400 Points, Metals Shine

BSE Sensex and Nifty came of the intraday high levels in the late noon deals but continued to trade on a strong note. Earlier in the day, the benchmark indices moved sharply higher, boosted by a rally in global markets. The Sensex gained over 500 points at its day's high while Nifty touched high 7,846. The rupee also gained today, lifting the sentiment in domestic stock markets. At 3:20 p.m., the Sensex was up 412 points at 25,729 while Nifty rose 132 points to 7,820. 

Here is a 10-Point Cheat-Sheet:

1) Despite the rebound in Indian markets for the second consecutive day, analysts remain skeptical about the sustainability of gains. They say that global markets, including India, were in an oversold territory which helped to spur a relief rally.

2) Analysts also remain worried about the relentless selling from foreign investors in Indian stock markets. Foreign investors sold a record Rs 16,877 crore worth of domestic stocks in August. On top of that, they sold Indian stocks worth nearly Rs 5,500 crore in the past six sessions.

3) Domestic institutional investors have been buyers of stocks despite the selloff from foreign investors, helping to provide some support to Indian markets. On Tuesday, they bought shares worth nearly Rs 450 crore. Since August 24, domestic institutional investors bought shares worth Rs 16,327 crore while foreign investors sold equities worth Rs 17,653 crore.

4) The gains were broad-based today with all the sectoral indices on the BSE trading in the green. Banking, IT, metal, auto and realty stocks outperformed today. The breadth of the market also remained strong with BSE midcap and smallcap indices surging over 2 per cent. 

5) Metal stocks were in limelight following overnight gains in copper prices in international markets. Copper, which is seen as a benchmark of global commodities demand, rose 2 per cent after data showed that Chinese imports of the metal held steady in August. Also, lifting the gains in metals, government officials have said that they are considering some safeguard measures in the face of a surge in steel imports. Vedanta, Hindalco, JSW Steel and Tata Steel were up between 5-7 per cent.

6) Indian markets are likely to remain volatile till the crucial US Fed meet, which is scheduled for September 16-17, say analysts. An interest rate hike in the US could accelerate the selling from foreign investors who would like to park their money in US bonds. Besides, a rate hike in the US would strengthen the dollar, putting further pressure on rupee.

7) Traders are also watching the value of the rupee which affects the dollar returns of foreign investors. The rupee traded rose to 66.25/dollar at its day's high against yesterday's close of 66.54.

8) Asian markets, including China, gained sharply today with Japan's Nikkei surging nearly 7.7 per cent, its biggest single-day gain since October 2008. China's benchmark indices also gained nearly 2 per cent. US stocks rose more than 2 per cent overnight amid a China-fuelled rebound in global equities. Hopes for more stimulus measures from the Chinese government increased after data on Tuesday showed that China's imports shrank far more than expected in August, falling for the 10th straight month.

9) China also said it would remove a tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment.

10) European markets were also trading on a strong note with Germany's DAX surging nearly 2 per cent, Britain's FTSE 100 advancing 1.78 per cent and French CAC 40 index gaining 2.2 per cent.