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The domestic market made a higher opening on Tuesday, led by strong global cues. Indian equity benchmark indices Nifty50 were up 0.9% and surged 516.33 points at the time of writing, extending gains to the second consecutive session.
The two-day rally on Dalal Street ahead of the festive Diwali season has led to an almost 1,200 point-jump in Sensex , while investors on the Street have added over Rs 2.2 lakh crore to their wealth. The headline indices surged almost 1.5% each in today’s session.
All the sectors contributed to Tuesday’s gains, led by banking, financial, FMCG, auto and IT.
Here are some factors driving the market’s rally today.
UK’s Economic Reversal
The newly-appointed British finance minister Jeremy Hunt made a solid U-turn in the country’s fiscal policy by abandoning most of the former PM’s economic plan that had led to market turmoil in recent weeks.
The dramatic turn of events in fiscal policy boosted investor confidence in global markets.
Overnight Rally on Wall Street & Strong Asian Cues
Thanks to Britain’s economic plan reversal in conjunction with the Bank of America (NYSE: BAC ) posting stellar quarterly results, major indices on Wall Street soared up to 3.5% in the overnight session, lifting optimism regarding the corporate earnings season.
As a result, Asian markets traded higher on Tuesday with indices like Japan’s Nikkei 225 , South Korea’s KOSPI , Hong Kong’s Hang Seng and Australia’s ASX 200 jumping up to 2%.
Weakening US Dollar
The US Dollar Index fell 1% on Monday and extended its downward movement on Tuesday as the Sterling strengthened following Hunt ditching the former FM’s mini-budget policy and a jump in US equities.
The Indian rupee appreciated 22 paise against the greenback on Tuesday and traded 0.12% lower at 82.06/$1 while writing.
Strong Futures
At the time of writing, Dow Futures surged 1.6% and Nasdaq 100 Futures rallied 2%. The early indicator for Nifty50, SGX Nifty Futures was up 1.1%.
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October 18, 2022
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