- 0
- 786 words
Why Is Share Market Rising Today? Know Key Reasons Behind Sensex, Nifty Rally on August 20
As of 9:50 am, the BSE Sensex was trading at 77,453.04, up 543.36 points, or 0.71%, from Wednesday’s close of 76,909.68. Know key drivers behind market rally today:
Summarized by AI.
Got Question about the News?
The domestic equity market extended its gains in early trade on Thursday, August 20, as investors returned to equities after a prolonged period of weakness. Buying was visible across IT, banking and several broader-market stocks, while the decline in India VIX pointed to easing volatility.
As of 9:50 am, the BSE Sensex was trading at 77,453.04, up 543.36 points, or 0.71%, from Wednesday’s close of 76,909.68. The NSE Nifty was at 24,204.90, up 126.60 points, or 0.53%.
Recommended Stories
The broader market was showing stronger momentum than the headline indices. The Nifty Smallcap 100 rose 0.88%, while the Nifty Smallcap 50 gained 0.90%. The Nifty Midcap 100 was up 0.55%. The Nifty Microcap 250 gained 0.80%.
Key factors behind market rally today
US bond yields have cooled: US Treasury yields retreated from their recent multi-year highs, easing pressure on emerging-market equities. Lower yields reduce the relative attractiveness of US bonds and improve risk appetite globally. The US Treasury said overnight it would double buyback sizes for long-duration debt as it sought to stanch an upward march in yields that sent the 30-year Treasury yield to its highest level since 2007 earlier this week.
Short covering after seven straight sessions of losses: Nifty had fallen for seven consecutive sessions, losing about 2.1% over that period. That created room for traders who had built short positions to cover them once the market started moving higher. The resulting buying can make a rebound look quite sharp.
The rupee recovered from its recent weakness: The rupee had fallen to around Rs 95.60 per dollar earlier this week amid high crude prices and dollar demand. A firmer rupee today is positive for sentiment because it reduces concerns around imported inflation and foreign-investor returns. The rupee on Thursday gained 9 paise to 95.64 against the US dollar in early trade, compared with the previous close of 95.73.
Positive global cues: Wall Street broke its three-day losing streak, while Asian markets are broadly positive. US futures are also slightly higher. That has provided a better opening environment for Indian equities.
Indian shares opened higher on Thursday, tracking broader Asia as global bond markets steadied after the US Treasury announced steps to bring down rising borrowing rates. Asian markets are trading higher, reinforcing the improved risk mood. Japan’s Nikkei 225 is up more than 1% in early trade, while South Korea’s Kospi has surged over 4%, reflecting renewed buying interest across regional equities following the moderation in global bond yields.
Value buying by investors: After the recent correction, valuations have become somewhat more attractive, particularly in pockets of the market where earnings remain resilient. Analysts have also pointed to improving corporate earnings and domestic consumption as underlying supports.
India VIX eases 4.4%: The India VIX, which measures expected market volatility, fell 4.37% to 10.83, suggesting that near-term market anxiety had eased.
Buying in IT stocks: IT stocks were among the biggest drivers of the early gains in markets. The Nifty IT index gained 1.41%, while the Nifty MidSmall IT & Telecom index advanced 1.25%.
Key Questions Answered
Ask News18Easing US bond yields can provide support to Indian stock markets like the Sensex and Nifty. Conversely, higher global bond yields have put pressure on Indian equities in the past.
Ask News18About the Author
Original source: https://www.news18.com/business/markets/
Author
admin@myncblogs.com