Global cues propel equity markets; Nifty and Sensex gain for second straight session on Wednesday

The markets were up globally on encouraging economic data.

Equities gained for the second straight session on Wednesday, helped by strong global cues and index heavyweight RIL. The Nifty gained 64.75 points, or 0.56%, to close at 11,535 while the Sensex was up by 185.23 points, or 0.48%, to close at 39,086.03.

The markets were up globally on encouraging economic data. Domestic economic data on manufacturing was also positive, which helped improve the market sentiment.

After a choppy session, the markets saw strong gains in the last hour on account of strong global cues. The markets reacted positively to IHS Markit’s Purchasing Managers’ Index (PMI) which showed that the August manufacturing was at 52 (above 50 indicates a pick-up in economic activities). Reliance Industries (RIL) jumped 1.97%, accounting for over half of the Sensex gains.

Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said: “The global sentiments were positive on the back of strong factory output data across major economies. Even India’s factory activity grew for the first time in five months, with indicators such as power and fuel demand, railway freight and mobility indices showing improvement. Thus positive economic data boosted market sentiments, though the court hearing on interest rate waiver and border tensions with China led to volatility.”

Markets in Singapore, Japan and South Korea ended the day higher between 0.05% and 0.63%. On the other hand, markets in Hong Kong and China were down by 0.26% and 0.17%. European markets were also trading higher.

Nagaraj Shetti, technical research analyst, HDFC Securities, said: “The short-term trend of the Nifty continues to be positive. The market is gradually gaining some momentum on the upside. The underlying near-term trend status remains weak and there are chances of profit booking emerging at the higher levels. Important supports to be watched around 11,350-11,400. The next upside resistance to be watched at 11,600.”

The futures and options segment on the NSE saw a turnover of Rs 20.11 lakh crore, against the six-month average of Rs 15.43 lakh crore. The cash market segment saw a turnover Rs 49,682.76 crore, against the six-month average of Rs 53,128 crore. Foreign portfolio investors on Wednesday bought stocks worth $130.33 million whereas domestic institutional investors sold stocks worth $86.5 million.

Significant gainers on the Nifty were Zee Entertainment, M&M, Tata Motors, Bharti Infratel and Adani Ports and SEZ, up by 7.53%, 6.01%, 5.35%, 3.89%, and 3.24%. Major losers were Bajaj Auto, Asian Paints, Hero MotoCorp, Nestle India and Sun Pharmaceuticals, down by 2.2%, 1.43%, 1.42%, 1.22%, and 1.18%, respectively.