Mumbai: India’s major stock indices opened higher on November 2 as the Sensex and Nifty indices saw gains of almost one percent in energy, auto and information technology (IT) sectors despite mixed global cues. However, lower crude oil prices and positive sentiment helped the domestic market.
The BSE Sensex surged 718.71 points or 0.97 percent to 75178.24 at the opening bell. While the NSE Nifty 50 index soared 169.20 points or 0.73 percent.
By 9.42 am, the Nifty 50 index was trading 1.08 percent higher at 23304.90, while the Sensex was trading 1.27 percent higher at 75404.64, Reuters reported.
Energy, Auto, IT Sectors Rise
The Nifty Oil & Gas index rose more than two percent to lead sectorial gains. The Nifty Auto index rose 0.77 percent and Nifty IT index rose 0.51 percent.
However, the Nifty Realty index dipped 0.74 percent and Nifty Media fell 0.06 percent.
“The market has shown clear upside reversal signals supported by domestic and international factors,” market experts said.
“Externally, Brent crude has eased from last week’s high of $118 to $110, which is definitely a relief. The US 10 year bond yield has fallen to 4.93 percent.”
The easing of the artificial intelligence (AI) trade has also helped the US tech sector.
“Perhaps the most important factor is that the AI trade has fallen significantly, which is helping the market as it dragged the Nasdaq down by 2.8 percent last Friday. A falling AI trade is favourable for India which is seen as a counter to AI.”
Economic Factors Push Domestic Markets
Credit growth of 17.94 percent and strong Goods and Services Tax (GST) collections in October have also helped the domestic markets, analysts said.
Furthermore, expectations of a potential overhaul of the long term capital gains (LTCG) tax in the upcoming Union Budget is also seen providing support.
“Another positive factor that can push the market higher is that there are growing expectations of a complete overhaul of the LTCG tax in the coming Budget. Most likely it will be removed completely. The market seems to have already priced this in. For now this is definitely positive for bulls,” they said.
Technical Factors
Technical indicators show positive sentiment.
The Relative Strength Index (RSI) for the Nifty has improved to 53.50 from its average of 45.97. The Put Call Ratio (PCR) is currently sitting at 1.24 showing a favourable setup in the derivatives market.
The immediate support for the Nifty is seen at 22900-23000 and resistance is seen at 23200-23250.
If prices can continue to rise above the 50 day Exponential Moving Average (EMA), then it can strengthen the bullish sentiment, analysts said.
Mixed Asian Markets Amid Lower Crude Oil Prices
Asian markets traded mixed on Monday as crude oil prices fell. Concerns over global supply issues eased.
International benchmark Brent crude fell around three percent to $109.97 per barrel, while US West Texas Intermediate (WTI) slipped nearly 3 per cent to $100.81.
This comes after Brent touched $118 per barrel last week. Positive sentiment in the Indian market has been seen as hopes of progress in talks to end the Iran conflict.
However, Wall Street closed in negative territory on Friday as the Nasdaq saw its biggest single day loss since June 5. Disappointing results from Intel and Amazon also sparked concerns over high spending on artificial intelligence.