The 30-share BSE Sensex pack surged 1,593 points to hit an all-time high of 83,116, while the broader NSE Nifty index moved 515 points to higher scale a lifetime peak of 25,433 on F&O expiry day. Such was the rise in the domestic bourses that over Rs 6.9 lakh crore of BSE market capitalisation (m-cap) was generated.
IT companies, which derive a substantial portion of their revenue from the US, rose by 1 per cent. Additionally, the Nifty Bank, Auto, Financial Services, Healthcare, and Oil & Gas sectors all saw gains of over 1 per cent.
As many as 256 stocks hit their 52-week high levels today. BSE 500 stocks such as Ajanta Pharma, Alkem Laboratories, Apar Industries, Apollo Hospitals, Bajaj Auto, Airtel, BLS, Britannia, Century Textiles, Chola Finance and Coforge hit their respective one-year high levels. That said, 36 stocks touched their respective one-year lows today.
What’s fueling D-Street bulls?
A significant number of short positions have accumulated in the system. As these shorts are being covered, it is driving the upward momentum in both the Nifty and Bank Nifty. This short-covering is contributing to the accelerated pace of the current market rally, said Nirav Harish Chheda, Technical and Derivatives analyst, Nirmal Bang.
Heavyweights Lead Rally
Bharti Airtel, Reliance Industries, HDFC Bank, and Infosys together added nearly 500 points to the Sensex rally. L&T, M&M, NTPC, ICICI Bank, and SBI were also significant contributors to the index’s gain.
US Fed Rate Cut Optimism
US consumer prices rose slightly in August, but underlying inflation showed some stickiness, data showed. That boosted the odds of a 25-basis-point Fed rate cut on September 18 to 85 per cent from 66 per cent, while the case for a larger 50-bps reduction dwindled to 15 per cent from 34 per cent, according to CME FedWatch.
“Latest US inflation numbers are mildly positive for markets. August CPI inflation coming at 0.2 per cent has brought down the 12-month inflation to 2.5 per cent from 2.9 per cent earlier. This paves the way for a rate cut by the Fed in September. But since core inflation continues to remain high at 3.2 per cent the Fed is likely to be cautious and refrain from a 50bp rate cut, finally settling for a 25bp rate cut,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
FIIs
Foreign institutional investors (FIIs) bought Rs 1,755 crore of shares on a net basis during the previous session and domestic institutional investors (DIIs) purchased Rs 230.90 crore of stocks, exchange data showed. FIIs remained net seller for 14th consecutive session.