Indian Stock Market Gains as US Markets Rally for Eight Days
New Delhi [India], August 20: Indian stock indices closed Tuesday’s trade in the green, tracking strong overnight cues from US markets. The Sensex closed at 80,802.86 points, up 378.18 points or 0.47%, while the Nifty settled at 24,673.45 points, up 100.80 points or 0.41%. The banking sector saw the most gains today.
US markets have now rallied for eight days in a row, recovering over USD 3 trillion of market cap from the August lows, according to analysts. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “With eight straight days of gains, the US market is sending positive signals which can keep this global rally going.”
He added, “The Fed chief Powell’s comments at Jackson Hole this Friday will be keenly watched by the markets. The likely scenario is a 25 bp rate cut by the Fed in September followed by two more rate cuts this year. This can continue to support the equity markets globally and in India too.”
Vijayakumar also noted that the decline in Brent crude below USD 78 is a macro positive for India. “At the micro level, this can lead to a mild rally in stocks of companies that use crude as input such as paints, adhesives, and tyres,” he said.
However, foreign institutional investors (FIIs) may continue to sell in India since other emerging market valuations are relatively attractive. Data from the National Securities Depository showed that foreign portfolio investors (FPIs) have sold stocks worth Rs 21,761 crore in India so far in August.
Going ahead into this week, investors will keep an eye on US Fed Chief Jerome Powell’s speech at the Jackson Hole symposium. The US Fed’s policy minutes, where the central bank may give hints about its monetary policy stance and possible loosening of interest rates, will also be closely monitored.
Today, the Indian rupee inched higher after the dollar index plunged to its lowest in several months and steady international crude oil prices. At the time of writing, the rupee was trading at 83.78 against the previous day’s closing of 83.83. Recently, the rupee was shy below the 84 mark.
Doubts Revealed
Stock Market -: A stock market is a place where people buy and sell shares of companies. It’s like a big marketplace for company ownership.
Sensex -: Sensex is a short form for the Bombay Stock Exchange Sensitive Index. It shows how the top 30 companies in India are doing in the stock market.
Nifty -: Nifty is a stock market index that shows how the top 50 companies listed on the National Stock Exchange of India are performing.
US Markets -: US markets refer to the stock markets in the United States, like the New York Stock Exchange (NYSE) and NASDAQ.
Banking Sector -: The banking sector includes all the banks and financial institutions that provide banking services like loans, savings accounts, and more.
Analysts -: Analysts are experts who study financial data and trends to give advice on investments and the economy.
USD 3 trillion -: USD 3 trillion is a very large amount of money, equal to 3,000,000,000,000 US dollars.
VK Vijayakumar -: VK Vijayakumar is a financial expert from Geojit Financial Services, a company that helps people with investments.
Geojit Financial Services -: Geojit Financial Services is a company in India that provides financial advice and services to help people invest their money.
US Fed Chief Jerome Powell -: Jerome Powell is the head of the US Federal Reserve, which is like the central bank of the United States. He makes important decisions about the US economy.
Indian Rupee -: The Indian Rupee is the currency used in India. It’s like how the US uses the dollar.
Trading at 83.78 against the dollar -: This means that one US dollar is worth 83.78 Indian Rupees. It’s a way to compare the value of money from different countries.