Sensex rises 500 pts, Nifty above 22,700 as Modi magic helps calm D-Street

The () on Wednesday formally named to lead the government. Unexpected have meant that Modi's needs to rely on alliance partners to stay in power.

Indian share benchmarks NSE 50 and S&P Sensex closed over 3% higher on Wednesday after slipping nearly 6% on Tuesday.

Meanwhile, in early trade, NTPC, SBI, and Power Grid from the Sensex pack opened 2.5% to 5% higher. Tech Mahindra, Tata Steel, Wipro, and HCL Tech also opened with gains, while HUL, Nestle India, Sun Pharma, and Asian Paints opened with losses.

On the sectoral front, Nifty Realty rose 3.9%, and surged 3.3%. Nifty Bank, Financial Services, IT, Media, Metal, Oil & Gas, and Consumer Durables also saw gains of up to 2%. On the other hand, Nifty FMCG and Pharma opened in the red.

Among individual stocks, BHEL hit a 10% upper circuit after receiving thermal power project orders, including one from .

Experts View

"As the market comes back to normalcy after the abnormal volatility of the last three days, the global construct has turned favourable with rising possibility of rate cuts by the Fed," said V K Vijayakumar, Chief Investment Strategist, .

"Clear signs of weakening labour market in the US has led to sharp decline in the US bond yield to 4.29%. Even though this is favourable for foreign capital inflows, the FIIs continue to sell on high valuations in India particularly in comparison to the cheap valuations of Chinese stocks," Vijayakumar added.

Deven Mehata, Research Analyst at , "Nifty can find support at 22,500 followed by 22,400 and 22,200. On the higher side, 22,750 can be an immediate resistance, followed by 22,800 and 22,900."

Global Markets
Asian shares gained on Thursday on rising expectations the U.S. Federal Reserve will likely cut interest rates in September, while the euro advanced ahead of the European Central Bank policy meeting where a rate cut is widely expected.

MSCI's broadest index of Asia-Pacific shares outside Japan was 1.14% higher, led by tech stocks. The index was on course for a 2.7% gain in the week and snap its two-week losing streak. Japan's Nikkei rose 1%.

China stocks also gained, with the blue-chip index up 0.38%, while Hong Kong's Hang Seng index added 0.81%.

FII/DII Tracker

Foreign institutional investors (FIIs) continued their selling for a second consecutive session on June 5 as they sold Indian equities worth Rs 5,656.26 crore, while domestic institutional investors turned net buyers as they purchased equities worth Rs 4,555.08 crore on the same day.

Oil Rises
Oil rose in early Asian trading on Thursday on rising expectations the Federal Reserve will cut interest rates in September, and as the market rebounded from a selloff related to growing U.S. inventories and an OPEC+ plan to increase supply.

Brent crude futures rose 27 cents, or 0.34%, to $78.68 a barrel, while U.S. West Texas Intermediate crude futures rose 36 cents, or 0.49%, to $74.43.

Rupee Falls
The Indian rupee weakened on Thursday despite broad gains in Asian currencies, which were pushed higher by improved odds of the Federal Reserve cutting policy rates later this year.

The rupee was at 83.43 against the U.S. dollar as of 09:35 a.m. IST, down from its close at 83.37 in the previous session.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)