The benchmark indices closed in the green on May 30, the first day of the week. All sectoral indices are trading in the green with IT, oil & gas and realty indices up 2-3 percent. The Bank Nifty ended 0.60 percent higher. India VIX crashed 7 percent to end the day just shy of 20 levels.
The stock markets made a gap-up opening and consolidate at higher range and closed near day's high. The BSE Sensex zoomed 1,041 points or 1.90 percent higher 55,925. The broader NSE Nifty 50 index soared 1.89 percent or 308 points to settle at 16,661.
Among sectors Realty, IT, Oil & Gas, Capital Goods and Consumer Durables rose the most. Broad markets did well as Midcap and Smallcap indices rose more than the Nifty and Advance decline ratio was sharply positive.
Among the top gainers on the Nifty were Titan , M&M, Adani ports, Infosys. Kotak mahindra Bank, JSW Steel & Sun Pharma were among the top losers.
Among gainers on the Sensex was Titan M&M, and Infosys. Kotak Mahindra Bank, Sun Pharma, and Dr Reddy’s were among the top losers.
Why the indices surged?
With clarity now arising from last week's US FOMC meeting about another 50 bps rate hike in the next few months, the market seems to be taking in its stride the future rate hikes and is now seen reversing the bearish trend, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
While fears of global recession and further rise in oil prices lurk, investors are currently engaged in buying after the recent free fall. Technically, in the last three days, the Nifty has rallied nearly 800 points and cleared the 16,400 resistance level which is broadly positive. For traders, 16,500 would be the trend decider level, above which the positive momentum is likely to continue till 16,750-16,800. Below 16,500, uptrends would be vulnerable. Any further retracement could see the index retest the level of 16,440-16,420, said Chouhan.
Easing of COVID restriction in China boost markets
Mohit Nigam, Head-PMS, Hem Securities said, the Indian markets are reacting to China's easing of COVID restrictions in Shanghai and Bejing and US Fed's minutes from the early May meeting with expectation of a potential pause in interest rate hikes later this year.
On the technical front, the key resistance levels for Nifty50 are 16,800 and on the downside 16,400 can act as strong support. Key resistance and support levels for Bank Nifty are 36,200 and 35,600 respectively, Nigam added.
Nifty rose for third consecutive session on positive global cues
Indian stocks were anyway due for a bounce after continuously underperforming since early April 2022. 16,800-16,850 level on the Nifty could be tough to breach in the near-term.
Deepak Jasani, Head-Retail Research, HDFC Securities said, Nifty rose for the third consecutive session on May 30 following positive global cues due to China easing COVID curbs and sharp Friday gains on the Wall street. Some local factors helping the mood include early arrival of monsoon in Kerala raising hopes of a favourable impact on agri crops.
World stocks turn positive in May on Fed bets
World share markets rose on Monday and the dollar was anchored at five-week lows on bets of a possible slowdown in USmonetary tightening and after an easing of COVID restrictions in China. The gains built on last week's rally, helping the MSCI's benchmark for global stocks turn positive on the month, as confidence in a less aggressive Federal Reserve grew following signs of peaking American inflation on Friday.
The pan-European STOXX 600 equity benchmark gained 0.7 percent, while Japan's Nikkei added 2.2 percent and Chinese blue chips firmed 0.7 percent. Although Wall Street will be shut for the Memorial Day holiday, US derivative markets were open. S&P 500 e-mini futures rose 1 percent, having rallied 6.6 percent last week in their best run so far this year, while Nasdaq e-minis added another 1.4 percent.
European stocks rose on Monday after China relaxed some of the strictest virus controls of the pandemic, fueling risk-on sentiment for economic recovery.
(With inputs from Reuters and Agencies)