Nifty 50, Sensex gain nearly 1% each after 3 days of losses: 5 reasons why

Stock market today: Frontline indices the Nifty 50 and the Sensex jumped about a per cent in early deals on Friday, January 19, after three days of losses amid positive global cues.

Nifty 50 opened at 21,615.20 against the previous close of 21,462.25 and soon rose about a per cent to hit its day’s high of 21,665.65. The Sensex opened at 71,786.74 against the previous close of 71,186.86 and jumped over 650 points, or nearly a per cent, to hit the intraday high of 71,876.83 in Friday’s trade so far.

Mid and smallcap indices on the BSE also jumped about a per cent.

Around 10:15 am, the Nifty 50 was 0.83 per cent up at 21,639.40 while the Sensex was also 0.84 per cent up at 71,785.22.

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Here are five key reasons that appear to have given a boost to the market:

1. Positive global cues

Positive global cues gave a boost to the domestic market sentiment. Japan’s Nikkei 225 rallied 1.4 per cent and the Topix gained 0.98 per cent. South Korea’s Kospi jumped 1.14 per cent, while Kosdaq surged 1.37 per cent during the trade.

Asian markets traded higher on Friday tracking an overnight rally on Wall Street fuelled by technology stocks. Investors also assessed Japan’s December core inflation data which came in at its lowest level since June 2022 ahead of the Bank of Japan’s monetary policy meeting.

Also Read: Indian stock market: 7 key things that changed for market overnight – Gift Nifty, S&P near record, US jobless claims

2. Value buying in select heavyweights

Over the past three consecutive sessions, both the Nifty 50 and the Sensex experienced a downturn of approximately 3 per cent each. In light of this market correction, investors are poised to capitalize on the opportunity by acquiring high-quality stocks. The prevailing sentiment in the market remains optimistic, driven by the anticipated prospects of robust economic growth and potential rate cuts.

Shares of banking and IT heavyweights, including HDFC Bank, ICICI Bank, TCS, Infosys and Axis Bank witnessed decent gains in the morning session.

Also Read: Nifty could hit 24,000 by year-end on monetary easing, FPI inflows, says Emkay Global

3. Banking index jumps over a per cent

Healthy gains in the banking index after three days of losses gave a fillip to the benchmarks as banking stocks have significant weight in the benchmark indices.

The Nifty Bank index jumped over a per cent in the morning session with most stocks in the green.

4. The role of retail, DIIs and HNIs

Market analysts observe that the resilience of the market against a potential downturn is attributed to the active participation and strategic interventions of retail investors, domestic institutional investors (DIIs), and high net-worth individuals (HNIs). Their collective efforts have effectively shielded the market from experiencing a significant crash.

“Retail investors, DIIs and HNIs are supporting the market,” said V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services.

“An important trend in the market which has implications for retail investors is the revival of the tug-of-war between FIIs and DIIs. FPIs have sold equity massively for ₹20,480 crore during the last two days. This is partly in response to the rising bond yields in the US where the 10-year yield has risen to 4.16 per…