In response to the mesmerizing rally of over 3-7% in Dow Jones and Nasdaq Nifty and Sensex made new 52-week highs today.
The major Indian indices NIFTY and SENSEX staged a rebound rally after yesterday’s wild market movements, which were led by NASDAQ Composite. HDFC Twin, who made their comeback today, stole the complete show of the Indian market. Today’s trading recorded gains of more than 7% for both HDFC bank and HDFC.
Cooling inflation numbers propelled the equity markets of the U.S. and Europe yesterday. There was a rally of over 3.5% in the Dow Jones and 5.5% in the S&P 500. But Nasdaq 500 showed a wild rally of 7% plus led by technology and chip maker stocks. This kind of ferocious rally on a single day was repeated only after the Corona pandemic.
The Dow Jones Industrial Average recorded its biggest one-day gain since markets started to emerge from the Corona pandemic. Dow Jones rose 1,201.43 points, or 3.7%, to 33,715.37. The S&P 500 posted its strongest gain since April 2020, rising 5.54% to 3,956.37. The Nasdaq Composite rose 7.35 percent to close at 11,114.15, its highest level since March 2020.
The 10-year Treasury yield in the United States sharply fell to 3.8%. And the value of the U.S. dollar index against other international currencies also suffered significantly. The U.S. dollar index experienced its largest one-day decline since 2009.
The consumer price index for the U.S. for October rose just 0.4% for the month and 7.7% from a year earlier. It was a decrease from the previous month’s 8.2% annualized rate and the lowest annual increase since January.
Continuous Fed rate hikes 6 times and soaring inflation caused already heavy damage to technology stocks. However, yesterday’s most recent inflation figures, which were lower than the street projection, caused much-anticipated excitement in the share market.
Large-cap stocks like Amazon, NVIDIA, Meta Platforms, and AMD surged more than 10% each.
The reaction of Dow Jones on Asian share markets
The continuation of the global rally’s effect boosted today’s Asian stock markets. In response to the mesmerizing rally of over 3% in Dow Jones and Nasdaq, Asian markets rallied wildly followed by Nifty and Sensex. Asian high beta stock market index, the Hang Seng index ended the day with the largest one-day gain of 7.7% in 2022.
Other Asian major indices like Nikkei 225 rose 2.98%, Shanghai rose 1.69%, Taiwan Weighted added 3.73% and the Kospi index surged 3.37%.
Asia’s fastest-growing nation and equity powerhouse India also cheered the rally of Dow Jones and Nasdaq. Indian benchmark indices the NIFTY 50 gained 1.78% and BSE Sensex gained nearly 1.95% as of today’s closing.
When other markets were having trouble with skyrocketing inflation and weak GDP, the Indian equity market already surpassed its international counterparts.
Today, NIFTY 50 made a high of 18362.3, and BSE SENSEX made an intraday high of 61840.97 which were the new 52-week highs for both benchmark indexes. NIFTY’s top constituent Reliance Industries also surged over 2% which helped the benchmark indexes hit new 52-week highs.
The NIFTY IT and NIFTY BANK indices made significant contributions to the overall gain today. HDFC BANK and HDFC, from the top 5 NIFTY components, are leading the surge with gains of 5.72% apiece. Global software exporters Infosys, TCS, HCL TECH, TECHM, and WIPRO from the IT pack each gained 3–4%.
Index-wise, the NIFTY IT index was the day’s top gainer with a rise of 3.81%, followed by NIFTY METAL with a rise of 2.03%.
Mostly the metal, banking, energy, and IT indices made significant contributions to today’s surge. With the exception of IT and materials, there wasn’t much exuberant activity in most mid-small-cap stocks.
Since Indian benchmark indices just need about 2% to reach a new all-time high, next week would be a very significant one to watch for the Indian market. If the global markets support this, market analysts anticipate a rally in the lagging stocks for the remainder of November.
