Summary of this article
Nifty 50 rises after seven straight sessions of losses
IT stocks lead gains amid broader market participation
Falling US bond yields, Asian gains and short covering support markets
Equity benchmark Nifty 50 snapped its seven-session losing streak on August 20, amid positive global cues. Buying across key sectors, led by IT stocks, further improved investor sentiment.
The Nifty 50 opened at 24,225.45, gaining 147.15 points, or 0.61 per cent, from its previous close. At 10:41 am, the index was trading around 24,208, up nearly 130 points, or 0.54 per cent.
The Sensex also extended gains, rising 535 points, or 0.69 per cent, to trade around 77,435.
The recovery was seen across the broader market, with mid- and small-cap stocks also trading higher. The Nifty Midcap 100 and Nifty Smallcap 100 indices gained between 0.50 per cent and 1 per cent.
IT Stocks Lead Sectoral Gains
Among sectoral indices, all except Nifty Oil & Gas traded in positive territory. Nifty IT emerged as the top gainer, rising around 1.50 per cent. Banks, financial services, metals and realty were also trading in the green.
The recovery also helped lift the overall market capitalisation. The combined market capitalisation of BSE-listed companies stood at Rs 491.86 lakh crore.
Eternal, Shriram Finance Among Top Nifty 50 Gainers
On the Nifty 50, Eternal, formerly known as Zomato, led the gains alongside Shriram Finance, Bajaj Finance, Infosys, JSW Steel, Jio Finance, Axis Bank, Kotak Mahindra Bank, Wipro and Cipla. These stocks gained between 1 per cent and 3 per cent.
On the other hand, Hindalco, ONGC, Asian Paints, Max Health and ITC were among the stocks trading lower.
Why Stock Market Is Up Today
Here are the key factors that are supporting the stock market today.
US Bond Yields Fall
A decline in US Treasury yields provided a positive trigger for global equities. The US Treasury announced plans to at least double its buyback of longer-duration government debt, helping ease some of the recent pressure on bond yields.
The benchmark 10-year US Treasury yield fell to around 4.64 per cent, while the 30-year yield declined to around 5.19 per cent. The two-year Treasury yield also eased to around 4.16 per cent.
Lower US bond yields improve the relative attractiveness of equities and ease concerns around global financial conditions, providing support to riskier assets.
Asian Markets Rally
Indian equities also took cues from a sharp recovery across Asian markets. South Korea's Kospi surged around 5.50 per cent, led by recovery in technology stocks after their recent selloff.
Japan's Nikkei rose around 1.16 per cent, while Hong Kong's Hang Seng gained around 1.19 per cent, and Taiwan’s Taiex rose around 0.48 per cent.
Wall Street also ended higher overnight. Dow Jones ended 0.22 per cent up, S&P 500 closed 0.21 per cent higher, and the tech-heavy Nasdaq gained 0.16 per cent.
Rupee Gains Against US Dollar
The rupee also strengthened in early trade, rising 17 paise to 95.57 against the US dollar, snapping its three-session losing streak. The dollar slipped to a three-month low after the US Treasury's announcement to increase buybacks of longer-duration bonds.
However, higher crude oil prices could limit the rupee's gains. Brent crude oil prices traded around $92 a barrel, keeping pressure on India's import bill and the domestic currency.
Short Covering Supports The Rebound
The market's recovery also came after two-weeks-long selling. The Nifty 50 had been on a downtrend since the first week of August, losing nearly 3 per cent during the period and marking its longest losing streak in nearly 11 months.
The sharp decline over the previous sessions have likely prompted short covering as global cues improved, adding to the day's gains.
