The BSE Sensex surged over 550 points and NSE Nifty surpassed 7,900 levels on Wednesday after a private weather forecaster Skymet raised the outlook for the 2016 monsoon amid firm global cues.
Nirdosh Gaur, managing director and CEO, Moneypalm said, “Overnight rally in US markets and Asian Markets saw the Indian markets trading strong on Wednesday. Upgrades in India’s rating by Morgan Stanley to ‘overweight’ and better-than-expected quarterly earnings from Bajaj Auto and Tech Mahindra also helped markets to move at higher levels.”
Below are top 8 reasons which supported market sentiments in today’s trade.
1) GDP forecast: Sentiments on the street improved after Citigroup said that India’s GDP growth for the fourth quarter of 2015-16 is likely to improve to 7.8 per cent – the highest pace in six quarters – on account of uptrend in economic activity and favorable base effect.
2) Meanwhile, Morgan Stanley upgraded India to ‘overweight’ from ‘equalweight’.
3) Monsoon: Traders also got encouragement with private weather forecaster Skymet predicting an above normal monsoon in India, starting in July. On Tuesday it announced that the monsoon will be 109 per cent of the long-period average, for the four-month period from June to September. It also said the monsoon would arrive on time in Kerala.
4) Rupee: Besides, appreciation in Indian rupee against dollar too supported the markets. Reversing its nine-day losing trend, the rupee recovered 20 paise to 67.55 against the US dollar in early trade today on account of fresh selling of the American currency by exporters and banks.
5) Most of the Asian equity benchmarks were trading higher in the early deals on Wednesday, taking cues from sharp gains in European and US markets, while the dollar firmed as upbeat US home sales supported the view that the economy may be strong enough for the Federal Reserve to raise interest rates in coming months.
6) Firm opening of markets further supported sentiment. European shares climbed to a new four-week high on Wednesday, with Novo Nordisk leading the market higher after a US advisory panel recommended approval of its new diabetes drug, while higher copper prices lifted miners.
7) Support also came in with Ficci stating that Chabahar Port agreement with Iran is a landmark development that will help Indian companies boost their engagement in Central Asia and also significantly reduce the transportation cost.
8) Short Coverings: Nikhil Kamath, co-founder and director, Zerodha said, ” A lot of shorts had built into the system over the last couple of weeks and this rally in part could be exaggerated by the covering of these short positions.”