Domestic market benchmarks Nifty 50 and Sensex have experienced gains for the second consecutive session on November 3. This positive momentum is attributed to improving investor risk appetite due to expectations of an end to monetary policy tightening.
Major central banks worldwide, including the US Federal Reserve, the Bank of England, and the European Central Bank, have left interest rates unchanged this month, raising hopes that interest rates have peaked.
Moreover, the domestic market is seeing increased buying activity due to more attractive valuations following a recent correction. In October, Nifty 50 experienced a 3% decline, but its forward P/E ratio is currently below its five-year mean, indicating limited downside, according to a report by BOBCAPS.
On November 3, Nifty 50 opened at 19,241 and closed at 19,230.60, up 0.51%. Sensex opened at 64,444.90 and closed at 64,363.78, up 0.44%. Over 180 stocks reached their 52-week highs during intraday trade. The overall market capitalization of BSE-listed firms increased, making investors wealthier by ₹2 lakh crore in a single session.
Crude oil prices traded with reduced concerns over tensions in West Asia, and the rupee fell slightly to 83.28 per rupee. Apollo Hospitals Enterprise, Adani Ports and Special Economic Zone, and Eicher Motors were the top gainers in the Nifty 50 index, while Bajaj Finserv, SBI Life Insurance Company, and Dr. Reddy’s Laboratories were the top losers.
All sectoral indices on the NSE ended positively, with Nifty Realty jumping 2.54%. Nifty Bank closed 0.70% higher at 43,318.25.
Investor optimism is fueled by global indicators, steady macroeconomic data, and strong domestic corporate earnings. The Federal Reserve’s likely decision not to raise rates in the future and a modest decline in oil prices are contributing to this optimism.
The ongoing Q2 results show healthy expansion in Indian operating margins, leading to strong earnings growth. Large-cap companies are indicating a solid 40% growth in PAT year-on-year. Despite some initial gains, uncertainty over higher inflation levels, the West Asian conflict, and its impact on the global economy have led to selective buying by investors.
Nifty has breached a resistance zone and tested the immediate hurdle of 100 EMA around 19,276. A decisive break above 19,400 is suggested for a sustained recovery, but traders are encouraged to focus on stock selection for opportunities.