Equity benchmarks gain over 1%; what's fuelling rally on D-Street today?

Indian equities after the previous day's losses gained ground and showed remarkable resilience. At the last count, Nifty was up by 0.95 per cent or 229.05 points at 24,346.05, while the Sensex traded higher by over 1 per cent or 804.1 at 79,690.32. Here are the likely factors that propelled the surge on the indices today:

Global markets positive

After the positive labour data in the US which showed that the jobless claims dropped in the past week and came in lower than expectations, the sentiment was improved on the Wall Street. Also, the Asian markets traded on a positive note as recession fears cooled. Further, a better inflation print from China also aided sentiment. MSCI Asia Pacific index traded with gains of 1.57 per cent.

Across the board buying

The global positive sentiment created a ripple effect on Indian indices and there was seen broad-based buying with the IT pack being the most resilient amid positive US jobs data and a rebound in the global markets.

Tech stocks are likely to stage a recovery today drawing inspiration from the positive US cues, said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Technicals

Anand James, Chief Market Strategist, Geojit Financial Services said as maintained yesterday, we prefer to see this as volatility rather than an outright collapse. Equally importantly, even though it would not stand another attack, the 50day SMA, now at 23938, still holds, inline with this stance. This along with the hourly MACD yet to fall below signal line despite yesterday’s hammering, we are encouraged to ride upswings that could be triggered by overbought oscillators. Directional trades thus await break of 23938-24389, with our preference to go long, aiming 24540, should we float above 24195. Or to aim for 23670, should we see below 23938.