Markets

Easing trade war worries boost Sensex, Nifty

NEW DELHI: Indian stock market advanced for a second straight day on Tuesday on reports that US President Donald Trump and his Chinese counterpart Xi Jinping have agreed to reach a mutually beneficial deal.

Falling crude oil prices and rising rupee also boosted sentiment on Dalal Street.

The stock market recovered from the days lows amid heightened activity in the futures and options segment ahead of November series expiry. F&O turnover for the day stood at Rs 9,99,504.75 crore, which was higher than Monday's Rs 7,76,197 crore.

The BSE Sensex for the day settled 159.06 points or 0.45 per cent up at 35,513.14, with 14 stocks ending in the green.

IT and banking stocks were the major contributors to Sensex's rise. Infosys, TCS, Reliance Industries, IndusInd Bank and Maruti were top index performers with gains between 2.53 per cent and 1.27 per cent.

However, Sun Pharma, Hero MotoCorp, YES Bank, Wipro, and Bajaj Auto shed up to 3 per cent.

The NSE benchmark Nifty gained 57.00 points or 0.54 per cent at 10,685.60.

BSE Midcap and BSE Smallcap index rose in line with Sensex and ended 0.32 per cent and 0.43 per cent higher, respectively.

On BSE, IT, teck and energy were the top sectoral gainers with gains of over 1 per cent each. Among 19 sectors, only four sectors saw losses, with BSE Metals the worst hit among them. The metal index ended 0.80 per cent down.

Key factors that helped the rally:

Trump-Xi truce?
Swinging between the two extremes, the domestic market lapped up the news of a possible trade truce between Trump and Xi. The leaders agreed to reach a mutually beneficial deal over trade in a November 1 phone call, China foreign ministry spokesman Geng Shuang said at a briefing, Bloomberg reported.

However, Trump said in an interview on Monday that he will likely move forward with his plans to impose new tariffs on Chinese goods in addition to duties on $200 billion of such imports in January.

Crude resumes downward trend
The news of falling crude oil prices helped the domestic markets stage a sharp rebound on Tuesday. Oil prices fell on Tuesday, depressed by record Saudi Arabian production even as the kingdom tried to persuade other exporters to agree on output cuts ahead of an Opec meeting next week, Reuters reported.

Brent crude once again slipped below $60 per barrel level. It was trading 70 cents down a barrel at $59.78 by 0838 GMT, still above a 13-month low of $58.41 reached on Friday. US light crude was 75 cents lower at $50.88.

Rise in the rupee
After snapping a seven-day winning streak on Monday, the domestic currency on Tuesday once again gained against the greenback to hit an intraday high of 70.75. The rising rupee soothed investors' nerves amid simmering trade war concerns.

At the time of writing this report, the rupee was trading at 70.77 against the US dollar, up 10 paise against the previous close of 70.87.

Expert take
Market smartly recovered from days low amid global trade tensions ahead of G20 meet this week & mixed Asian peers. Risk element on inflation is subsiding with rise in oil production, strong rupee and drop in yield, CPI inflation is expected to be under the control range. IT outperformed due to favorable valuation while ease in liquidity concern on PSU banks supported the sentiment.
Vinod Nair, Head of Research, Geojit Financial Services

Original Article