Wednesday, Jul 06, 2022
Outlook.com

Sensex Surges Over 1,000 Points, Nifty Above 17,250 On Strong Global Cues

The Sensex opened at an intraday high of 870 points and the Nifty 50 index surpassed its important psychological level of 17,000.

Sensex.
Sensex.

The Indian equity benchmarks surged on Thursday on the back of a strong upmove in global markets after the US Federal Reserve increased key interest rates by 25 basis points to keep inflation under check in US which is at highest level in over four decades, as anticipated by analysts.

The Sensex surged as much as 1,002 points and Nifty 50 index was trading firmly above 17,250.

Asian Markets joined rally on Wall Street after US Fed hiked interest rates by 25 basis points as expected. China's assurance to support the economic growth in the backdrop of rising Covid 19 cases also supported bullish sentiment in Asian markets. Chinese Vice Premier Liu He signaled more stimulus to support markets on Wednesday sending Hang Seng up 5 per cent, Japan's Nikkei rose 3 per cent and South Korea's KOSPI advanced 1.7 per cent. As of 9:18 am, the Sensex was up 847 points at 57,663 and the Nifty 50 index climbed 242 points to 17,218.

Overnight, stocks reversed an afternoon fade and closed broadly higher Wednesday after the Federal Reserve announced its first interest rate hike since 2018.

As Wall Street largely anticipated, the central bank announced it was increasing its key short-term rate by 0.25 percentage points. The Fed, which has kept its rate near zero since the pandemic recession struck two years ago, also signaled potentially up to seven rate hikes this year.

The S&P500 rose 2.2 per cent, the Dow Jones Industrial Average gained 1.5 per cent and the Nasdaq composite climbed 3.8 per cent, its biggest gain since November 2020.

The Federal Reserve launched a high-risk effort Wednesday to tame the worst inflation since the early 1980s, raising its benchmark short-term interest rate and signaling up to six additional rate hikes this year.

The Fed’s quarter-point hike in its key rate, which it had pinned near zero since the pandemic recession struck two years ago, marks the start of its effort to curb the high inflation that followed the recovery from the recession. The rate hikes will eventually mean higher loan rates for many consumers and businesses.

Back home, stocks of the banking sector, financial services, consumer durables, and realty sector were witnessing strong  buying interest. 

The Nifty Midcap 50 Index was up 1.39 per cent at 8,006, whereas the Nifty Midcap 100 was up 1.24 per cent at 28,939. Amongst Nifty 50 shares, Titan, Asian Paints, HDFC, Tata Consumer Products, Kotak Bank, and Axis Bank were top gainers, while Indian Oil Corporation, ONGC, Cipla, HCL Tech and Britannia were the top losers. 

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