Markets extend winning momentum on US Fed rate cut hopes; Sensex rallies 600 pts

Mumbai: Stock market benchmark indices Sensex and Nifty surged nearly 1 per cent on Monday, propelled by intense buying in metal, IT and consumer durable stocks amid hopes that the US Federal Reserve will start cutting interest rates soon.

Renewed Foreign fund inflows and buying in frontline stocks HDFC Bank and Reliance Industries further bolstered investor sentiment, traders said.

Rising for the fifth straight day, the 30-share BSE Sensex jumped 611.90 points or 0.75 per cent to settle at 81,698.11. During the day, it surged 738.06 points or 0.91 per cent to 81,824.27.

A total of 2,189 stocks advanced, while 1,860 declined and 148 remained unchanged on the BSE.

The NSE Nifty soared 187.45 points or 0.76 per cent to 25,010.60, registering gains for the eighth session in a row.

Among the 30 Sensex firms, HCL Technologies, NTPC, Bajaj Finserv, Tech Mahindra, JSW Steel, Titan, Mahindra & Mahindra, Tata Steel, Larsen & Toubro and Tata Consultancy Services were the biggest gainers.

On the other hand, Kotak Mahindra Bank, IndusInd Bank, Maruti and Hindustan Unilever were among the laggards.

In the broader market, the BSE midcap gauge jumped 0.66 per cent and the smallcap index soared 0.20 per cent.

"US Fed has signalled a rate cut in September, reflecting in the decline in US treasury yields and the dollar index, which has led to a rally in global markets despite there being no indication of the size of cuts. Indian markets hit a new high led by a change in FII stance to positive from negative, along with continued strong DII inflows.

"Although the overall trend was positive, large caps outperform on account of healthy earnings and relatively fair valuation compared to broader markets. IT, Realty, FMCG and Consumption gained on account of improved outlook," Vinod Nair, Head of Research, Geojit Financial Services, said.

Among the indices, metal surged 2.03 per cent, realty (1.69 per cent), consumer durables (1.43 per cent), IT (1.37 per cent), teck (1.11 per cent) and commodities (0.91 per cent).

Telecommunication and services were the laggards.

In Asian markets, Shanghai and Hong Kong settled in the positive territory while Seoul and Tokyo ended lower.

European markets were trading mostly lower. The US markets ended with significant gains on Friday.

"Markets kicked off the week on a positive note, gaining over half a per cent, driven by a dovish stance from the US Fed," Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,944.48 crore on Friday, according to exchange data.

Global oil benchmark Brent crude climbed 1.08 per cent to USD 79.87 a barrel.

"Optimism was the order of the day as dovish statements by the Fed Chair last week sparked positivity across the globe and also at Dalal Street. Markets shrugged off the recent sluggish trading sessions, as the US Fed chairperson, last week, pointing towards a likely rate cut fuelled a major rally that saw Nifty close above the crucial 25k mark.

"While simmering tension in West Asia may continue to keep investors on the edge, India, relatively better off compared to other major economies, could continue to attract investor flows in the medium term," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Rising for the fourth straight session on Friday, the BSE benchmark ended 33.02 points or 0.04 per cent higher at 81,086.21. The NSE Nifty edged up 11.65 points or 0.05 per cent to close at 24,823.15, registering gains for the seventh session in a row.