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The BSE Sensex, which surged 1,046 points to an intraday high of 79,639 leve, was up over 600 points at 11:30 AM. The Nifty50, too, jumped 346 points to a high of 24,338 intraday and was up 225 points at 24,218 level at the time of writing of this report.
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The Nifty MidCap and SmallCap indices were also ruling 1.7 per cent higher each at 11:30 AM.
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Here are the top reasons why Sensex, Nifty rallied today, Aug 7:
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Bank of Japan statement
Assuring investors of interest rate stability, Shinichi Uchida, the deputy governor of Bank of Japan said on Wednesday that the central bank would not hike interest rates when markets are unstable.
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In a statement early morning, Uchida said the intense market volatility, seen over the past week, could “obviously” change the BoJ’s rate hike path.
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“As we’re seeing sharp volatility in domestic and overseas financial markets, it’s necessary to maintain current levels of monetary easing for the time being,” Uchida said.
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Asian markets rally:
Reacting to the news, Asian markets stabilised today with Japan’s Nikkei rising over 2 per cent in intraday trade.
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Nikkei was up 1.6 per cent while writing this report, South Korea’s Kospi was ruling 1.7 per cent higher, Hong Kong’s Hang Seng 1.7 per cent, Australia’s ASX20 0.4 per cent, and China’s Shanghai Composite 0.3 per cent.
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Yen slumps:
The Japanese yen extended its loss against the dollar on Wednesday after Bank of Japan Deputy Governor Shinichi Uchida said that policymakers won’t raise the benchmark interest rate if financial markets are unstable.
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The currency weakened more than 2 per cent against the dollar before trading down 1.6 per cent at 146.69 in early morning Asian trade.
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US stock futures in green:
Stock futures linked to Wall Street main indices were higher on Wednesday after Wall Street snapped a three-day string of declines overnight.
Futures tied to the S&P 500Â gained 0.68 per cent, while Nasdaq 100 futures jumped 1.1 per cent. Dow Jones Industrial Average futures rose over 200 points or about 0.6 per cent.
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Overnight, the Dow Jones Industrial Average gained 0.76 per cent, while the S&P 500 rose 1.04 per cent. The tech-heavy Nasdaq Composite rose 1.03 per cent.
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No signs of war between Iran-Israel so far:
Israel had informed its Cabinet over the weekend that the country was already in a “multi-front war” with Iran and its proxies following the assassination of Hamas leader Ismail Haniyeh in Tehran the week before.
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Iran, meanwhile, had insisted that it will respond, with Ministry of Foreign Affairs spokesperson Nasser Kanaani saying on Monday that regional stability could only come from “punishing the aggressor”, sending equities into a tailspin that day.
That said, it has almost been a week since the killigs of hamas leaders, yet no major attack on Israel has been conducted yet.
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Technical levels:
The market managed another gap-up opening, with the Nifty opening at 24,300. If the Nifty maintains its early gains and breaks through the 24,350 level, short covering could push it towards 24,500, according to Shrey Jain, founder and CEO, SAS Online.
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“For today’s expiry, Bank Nifty is likely to face selling pressure at higher levels, with 50,500 expected to act as a key resistance point. This Call strike has significant open interest of around 35 lakh shares, while the 50,000 Put strike has an open interest of about 17 lakh shares,” he said.
First Published: Aug 07 2024 | 12:24 PM IST
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