Stock Market India: Benchmark equity indices gain ground despite global sell-off
Indian equity benchmarks gained on Friday, extending their winning streak for the sixth straight day even as Treasury yields scaled to their highest since the global financial crisis on concerns about aggressive rate hikes and their impact on the global economy.
The BSE Sensex index rose 327.9 points to 59,530.80 in early trade, and the NSE Nifty index advanced 89.65 points to 17,653.60, defying the broader Asia indexes in the red.
Both benchmarks have rallied - including the reversal of losses in the morning sessions - despite the weak investor sentiment globally for risk assets.
"Domestic equities may wobble in early trades Friday, tracking sideways movement in SGX Nifty after US markets ended lower in the overnight trades," said Prashanth Tapse, Senior Vice President for Research at Mehta Equities, ahead of the opening bell.
"However, market sentiment could get a leg up after FIIs turned net buyers of local shares in yesterday's trade. Besides, the rupee strengthening below the 83 mark, better-than-expected Q2 earnings so far, and oil prices staying sluggish at $85 a barrel would help the market extend gains ahead of the Diwali festival," he added.
According to preliminary data from the National Stock Exchange, Foreign Institutional Investors (FIIs) bought shares worth 18.65 billion Indian rupees ($225.2 million) on Thursday, while domestic investors sold shares worth 8.87 billion rupees.
Markets will also eye the quarterly earnings results later in the day of oil-to-retail conglomerate Reliance Industries, India's most valuable company.
Meanwhile, Asian shares tracked Wall Street lower, with indexes falling in Australia, South Korea, and Japan. Hong Kong and mainland Chinese stock prices were in a see-saw mode.
The MSCI's largest index of Asia-Pacific shares outside of Japan was down 0.5 per cent, albeit higher than the two-and-a-half-year low it hit in the previous session.
As a result of economic uncertainty that caused the S&P 500 to go from gaining more than 1 per cent to losing about the same proportion, US futures declined in Asia hours.
"It's all so tenuous...the problem is the macro environment still remains difficult," Shane Oliver, Chief Economist at AMP Capital, told Reuters, adding that the market is in a tug of war between investors who see opportunities and those who are focused on the difficult environment.
Ahead of the $2 trillion options expiry on Friday and a slew of new corporate earnings, US equity volatility is not showing any signs of abating.
US technology stocks experienced more extreme intraday movements than the S&P 500 after Patrick Harker, President of the Philadelphia Federal Reserve, implied that the central bank will "keep hiking rates for a while."
"We're in the middle of third-quarter earnings season in the US, and I think the thing that really stands out is the lack of downgrades that we've seen," Julia Lee, Equity Investment Strategist at State Street Global Advisors, said on Bloomberg Television.
"We've seen commentary around still a very strong economic backdrop, and this is exactly what the Federal Reserve doesn't want to see."
Meanwhile, as investors processed the news that British Prime Minister Liz Truss had resigned after only six weeks in office, the sterling fell in the currency market.
Given the UK Finance Minister's complete rejection of Ms Truss' proposals, no one was surprised by her resignation, according to Tapas Strickland, Head of Market Economics at the National Australia Bank.