Stock Market India: Sensex, Nifty rally around 0.8%
Indian equity benchmarks reversed losses from earlier in the session to gain on Monday and extended their rally for the second straight day despite cautious global sentiment as investors looked to corporate earning announcements for further guidance.
The 30-share Sensex index gained 491.01 points to end at 58,410.98 points, and the broader NSE Nifty-50 index rose 126.10 points to 17,311.80 points, reversing losses in early trade.
Asian shares, though, slipped to begin the week.
Global stocks have been impacted by worries about the world economy and a rise in demand for safe-haven assets as the Federal Reserve swiftly raised interest rates this year to rein in soaring inflation, which enticed capital back to the United States and drove up the value of the dollar.
On Monday, stocks rose as investors prepared for several earnings releases this week, likely to drive markets. US equity contracts rose ahead of earnings from Tesla, Goldman Sachs, and the Bank of America.
But the outlook for US consumer prices is also a major factor suggesting that the Fed will raise interest rates significantly at its next two meetings, which would significantly negatively impact the outlook for markets and global economic growth.
According to a Bloomberg report, Morgan Stanley Strategist Michael J. Wilson, a long-time equities bear, said US stocks are ripe for a short-term rally in the absence of an earnings capitulation or an official recession.
A 25 per cent slump in the S&P 500 this year has left it testing a “serious floor of support” at its 200-week moving average, which could lead to a technical recovery, he wrote in a note on Monday.
While the S&P is an eye-watering 25 per cent off its peak, BofA Economist Jared Woodard warned the slide was not over given the world was transitioning from two decades of 2 per cent inflation to a time of something more like 5 per cent inflation, reported Reuters.
“$70 trillion of ‘new’ tech, growth, and government bond assets priced for a 2 per cent world are vulnerable to these secular shifts as ‘old’ industries like energy and materials surge, reversing decades of under-investment,” Mr Woodard wrote in a note.
“Rotating out of 60/40 proxies and buying what is scarce – power, food, energy – is the best way for investors to diversify,” he added.
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