Summary of this article
Sensex and Nifty gained as weak US jobs data boosted investor sentiment
IT stocks led the rally on hopes of fewer US interest rate hikes
Asian markets rose, while lower crude oil prices supported market optimism
Equity benchmarks opened higher on July 3, tracking gains across Asian markets as IT stocks rallied and softer-than-expected US jobs data eased concerns about aggressive monetary tightening by the US Federal Reserve.
At 10:30 AM, the 30-share BSE Sensex was up 545.89 points, or 0.70 per cent, at 78,048.01. Likewise, the 50-share NSE Nifty traded higher by 173.85 points, or 0.72 per cent, to 24,346.90.
The broader Nifty Midcap 100 and Nifty Smallcap 100 indices were also higher, albeit marginally. Barring the Nifty PSU Bank index, all sectoral indices traded in the green. Nifty IT, Pharma, Healthcare, Realty and Metal led the gains, rising over 1 per cent each, while Bank, FMCG, Auto and Oil & Gas indices also traded higher.
IT Stocks Lead Rally
The Nifty IT index emerged as the top sectoral gainer, rising nearly 2 per cent. The rally came after weaker-than-expected US jobs data reinforced hopes that the US Federal Reserve may refrain from raising interest rates in the near term.
A softer interest rate outlook in the US is generally positive for Indian IT companies, which derive a significant portion of their revenue from the American market. Lower borrowing costs tend to support business spending in the US, boosting demand for technology services. They also improve the appeal of emerging markets such as India, encouraging foreign capital inflows.
Nifty 50 Top Gainers & Losers
HCL Technologies led the gains on the Nifty 50, climbing 4.78 per cent, followed by Tech Mahindra, which rose 3.39 per cent. Dr Reddy's Laboratories and Sun Pharma gained 2.25 per cent and 2.22 per cent, respectively. Trent, Apollo Hospitals, Tata Steel, Bharat Electronics, Eternal, Wipro, Bajaj Finance, Hindalco, UltraTech Cement, Bajaj Finserv, Max Healthcare, ONGC, Tata Consultancy Services, Shriram Finance, Bharti Airtel and Coal India also traded higher, gaining between 1 per cent and 2 per cent each.
On the losing side, Adani Enterprises, HDFC Life Insurance, Adani Ports, Kotak Mahindra Bank, Tata Consumer Products, InterGlobe Aviation, Axis Bank and State Bank of India were among the top drags on the benchmark index.
Global Indices Rise On Easing Fed Rate Hike Bets
Asian markets traded higher in early trade as investors welcomed softer-than-expected US jobs data.
MSCI's broadest index of Asia-Pacific shares outside Japan edged higher after two consecutive sessions of losses. South Korea's Kospi surged more than 5 per cent after recovering from a weak start, while Japan's Nikkei 225 gained over 1 per cent after opening lower. Hong Kong's Hang Seng and China's CSI 300 also advanced around 1 per cent each. Australia's ASX 200 rose 1.30 per cent, while Taiwan's Taiex was largely flat after spending most of the session in negative territory.
Wall Street ended on a mixed note overnight after weaker-than-expected US jobs data reinforced hopes of a less aggressive Federal Reserve. The Dow Jones Industrial Average rose 1.14 per cent to a record closing high, extending its winning streak to four sessions. The S&P 500 ended little changed, while the Nasdaq Composite slipped 0.80 per cent as another sharp sell-off in semiconductor stocks outweighed gains in other sectors.
Crude Oil Prices Support Rally
Crude oil prices rose marginally, though stayed near their recent lows as hopes of a breakthrough in US-Iran talks kept concerns over supply disruptions at bay. The subdued oil prices also offered some relief to markets, particularly for oil-importing economies such as India.
Brent crude was up about 0.72 per cent at around $72.33 a barrel, while US West Texas Intermediate traded near $69.10 a barrel, up 0.60 per cent from previous close. Even after the day's gains, both contracts remained close to their lowest levels in four months, reflecting easing geopolitical tensions and expectations of adequate global oil supplies.
