Global headwinds ease,

sentiment optimistic

FPJ News Service MUMBAI

The domestic market witnessed a broad-based recovery on Monday amid growing optimism around the forthcoming US-China trade talks, and renewed foreign fund inflows. Reflecting the new but cautious optimism, the 30-share BSE Sensex climbed 566.96 points to close at 84,778.84. During the day, it surged 720.2 points to 84,932.08. The 50-share NSE Nifty climbed 170.90 points to 25,966.05.

“Softer-than-expected US CPI data renewed expectations of a Fed rate cut this week, boosting investor confidence. Easing global headwinds, coupled with strong domestic reforms, provided cues for domestic earnings growth and justified the current premium valuations,” said Vinod Nair, head of research, Geojit Investments.

According to Dr VK Vijayakumar, chief investment strategist, Geojit Investments, the global market construct is bullish. With Dow Jones, Nikkei and Kospi at record highs the sentiments are positive. Globally, there are signals of declining trade tensions. Comments from the US treasury Secretary that there is a “substantial framework for trade negotiations with China” indicate that a US-China trade deal is on the cards.

For India, the fundamentals are turning positive with brisk festival season sales and reports of a smart pick up in capital spending by the private sector. This long awaited trend has significant positive implications for India’s growth and stock market. Conditions are favourable for the Nifty and Sensex to climb to record highs. An important feature of the ongoing rally in the market is its correlation with short-covering. This trend has some more way to go.

Bharti Airtel, Reliance Industries, Eternal, State Bank of India, Tata Steel and HDFC Bank were among the top gainers. Kotak Mahindra Bank, Bharat Electronics, Infosys and Bajaj Finance were among the top losers.