Market Watch: Are domestic markets pricing in a less aggressive rate hike by the US Fed?

Welcome to ETMarkets Watch, the show about stocks, market trends and money-making ideas. I am Bhaskar Dutta and here are the top headlines at this hour.

-10.7% increase in counterfeit notes in FY22
-State-owned banks see FY22 profit uptick
-Tata Motors signs Memorandum of Understanding for Ford plant
-M&M to launch electric version of XUV 300
-Airtel broadband launches 3 new plans
-India Post delivers mail using drone in Gujarat

Let’s take a quick glance at what happened on Dalal Street today.

Buoyed by a rally in major global stock markets, domestic equities notched up hefty gains on Monday to close higher for the third straight day.

A firm set of US economic data, a sharply lower dollar index and easing inflation concerns in the world’s largest economy all improved market sentiment, lifting appetite for domestic stocks.

Strong buying in index heavyweights such as Reliance and Infosys boosted the Nifty and the Sensex, with the rally making investors richer by more than Rs 5 lakh crore.

With the sharp decline in the dollar index giving the rupee a boost, investors felt that the ferocious selling pressure shown by FPIs over the last few months could ease somewhat, especially as valuations of Indian equities now look more reasonable.

The BSE Sensex swung in a band of 616 points before closing 1,041 points higher at 55,925.74. Its broader peer, the Nifty50, moved in a band of 189 points before settling 309 points higher at 16,661.40.

26 of the 30 stocks on the BSE Sensex ended in the black. Titan gained 4.9 per cent, followed by M&M and Infosys, which rose 4.7 and 4.6 per cent, respectively. L&T gained 3.8 per cent, followed by Tech Mahindra which rose 3.6 per cent.

Kotak Mahindra shed 2.2 per cent, followed by Sun Pharmaceuticals, which lost 1.8 per cent. Dr Reddy’s lost 0.7 per cent.

12 stocks hit upper circuits while 3 tested their lower circuit limits during the day. 20 stocks tested their 52-week highs during the session, whereas 31 tested their 52-week lows.

We have Narendra Solanki from Anand Rathi Shares & Stock Brokers to share his views on the day’s action and the road ahead:
Welcome to the show sir:
1. Judging by the recent surge in indices, are domestic markets pricing in a less aggressive rate hike stance by the US?
2. With India’s PE multiple now dropping below the 5-year mean, are valuations looking attractive?

We also caught up with Vaishali Parekh of Prabhudas Lilladher to decode the technical charts for you.
1. The Nifty50 settled near the 16,600 level. What do the technical charts suggest about it?

2. After outperforming last week, Bank Nifty did not fare as well as the headline index today. What is the technical outlook?

Asian stocks settled with gains for the day. European markets were trading with decent gains. US stock futures were up, signaling a strong start to US equities later in the day.

That’s all for now. Do check out ETMarkets.com for all the news, market analysis, investment strategies and dozens of stock recommendations. Enjoy your evening. Bye Bye!

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