At 11:42 a.m., the BSE’s flagship Sensex was up 625 points, or 1.64 percent, to 38,693, while the NSE’s benchmark Nifty was up 174 points, or 1.55 percent. at 11,422. All sectors saw purchases, yet some consumer goods names were under pressure.
India’s VIX slumped 4.46 percent, reflecting the easing of traders’ volatility expectations. The index was trading at 18.65.
In Sensex’s 30-share pack, Bajaj Auto gained the most, up 6.60 percent to Rs 3,069.65, as investors expected an improvement in car sales. It was followed by IndusInd Bank, Bajaj Finance, Bajaj Finserv, Axis Bank and HDFC which gained in the range of 2 to 5 percent.
On the other hand, ONGC, Titan, Nestlé India and NTPC fell as much as 2 percent in Mumbai trade.
The broader market indices underperformed their major peers, as Nifty Smallcap rose 0.91 percent, while Nifty Midcap added 0.95 percent. The broadest NSE index, the Nifty 500, was up 1.15 percent.
Main factors driving the market:
American stimulus
Hopes for a massive stimulus package that can be announced in a few days helped boost sentiment around the world as it will help a rapid economic recovery. This is even more important when the U.S. gross domestic product plummeted at an annualized rate of 31.4 percent in the second quarter, the steepest drop since the government began keeping records in 1947.
U.S. Treasury Secretary Steven Mnuchin said Wednesday that talks with House Speaker Nancy Pelosi made progress on COVID-19 relief legislation, and the House of Representatives postponed a vote on a $ 2.2 trillion Democratic plan to allow more time for a bipartisan deal to be finalized.
Optimistic global markets
Optimistic global markets also lifted spirits on Dalal Street
. S & P500 futures rose 0.6 percent in Asia, extending the rally in Wall Street stocks overnight after strong employment data and talks on progress on COVID-19 relief legislation. , which was delayed for a long time. On Wednesday, the S & P500 gained 0.83% and the Nasdaq Composite added 0.74%.
MSCI’s broader Asia-Pacific equity index outside of Japan rose 0.3%, and Australian stocks rose 1.4%.
But regional trade declined due to system failures on the Tokyo Stock Exchange (TSE) and holidays in Greater China and South Korea.
Bullish macro numbers
A flurry of economic data surprised mostly to the upside, with the ADP National Employment Index outperforming analysts’ expectations and pending home sales rising to an all-time high.
Contracts to buy previously owned homes in the United States soared to a record in August, suggesting that housing market activity was accelerating amid historically low mortgage rates. The National Association of Realtors said Wednesday that its pending home sales index, based on contracts signed last month, rose 8.8 percent to a record high of 132.8 last month.
Unlock 5
The government announced guidelines to open more activities outside of the containment zones starting on October 1, which also encouraged investors. They include movie theaters, sports activities, amusement parks and B2B exhibitions.
In addition, the central government also prohibited the imposition of any local closures outside the containment zone, eliminating the threat of business disruption in pockets.
Car sales numbers
Encouraging car sales figures also boosted investor morale. Maruti Suzuki India recorded total sales of 1.60,442 units in September 2020, a growth of 30.8 percent over the same period of the previous year. However, the performance should be viewed against the backdrop of a lower September 2019 base.
Similarly, Bajaj Auto posted a 10 percent growth in sales, led primarily by two-wheelers. The company sold 4,41,306 units in September. Exports were the highest in history at 2,12575 units, the company said.
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