Domestic equity benchmarks achieved fresh highs on Wednesday after weak jobs data in the US renewed hopes for rate cuts by the US Federal Reserve (Fed). Continuing its upward trend for the seventh consecutive day, the S&P BSE Sensex concluded the session at 69,654, gaining 358 points, or 0.5 per cent. The National Stock Exchange Nifty ended the session at 20,938, earning 83 points, or 0.4 per cent.
Job openings in the US fell to a more than 2.5-year low in October. On Tuesday, the US Department of Labor’s Job Openings and Labor Turnover Survey, or JOLTS report, revealed that there were 1.34 vacancies for every unemployed person in October, up from 1.47 in the previous month and the lowest since August 2021.
Job openings fell by 617,000 to 8.73 million in October, the lowest level since March 2021, and down from 9.35 million in September.
Experts suggest that this is a sign that higher interest rates have dampened worker demand and raised bets that the Fed’s monetary policy tightening cycle is over.
A statement by a European Central Bank (ECB) official that the recent inflation number has made a further rate increase rather unlikely has also boosted investor sentiment. The statement by ECB executive board member Isabel Schnabel came after Eurozone consumer price growth slowed to 2.4 per cent.
Indian equities have been rallying this week as investors have been buoyed by the just-concluded state elections, increasing bets for regime continuity next year. In the state polls, the Bharatiya Janata Party won three of the five states with a comfortable majority. The results exceeded market expectations as the elections were considered a close fight.
Gross domestic product data for the July-September quarter released last week showed the Indian economy expanded by 7.6 per cent, surpassing the Reserve Bank of India’s estimate of 6.5 per cent. The Purchasing Managers’ Index for manufacturing rose to 56 in November, up from 55.5 in October. A figure above 50 indicates expansion.
Foreign portfolio investors (FPIs) sold shares worth Rs 80 crore, while domestic institutional investors (DIIs) were buyers to the tune of Rs 1,372 crore, according to provisional data provided by stock exchanges.
“India is also now the fastest-growing large economy and, at this pace, will contribute to 10 per cent of global growth this year. The country is rewriting its growth story supported by an improved earnings outlook, leveraged corporate balance sheets, and robust inflows from FPIs and DIIs. In our view, all the right ingredients are in place to set the growth momentum further,” said Ashish Gupta, chief investment officer of Axis Mutual Fund.
Adani Group stocks continued to climb, adding another Rs 63,600 crore in market value, taking the total to Rs 14.5 trillion, surpassing HDFC Group to reclaim the third position as the country’s most valued conglomerate. The total market cap of BSE-listed companies rose to Rs 349 trillion ($4.3 trillion).
The market breadth was neutral, with one advance for every decline on BSE. Two-thirds of Sensex stocks gained. ITC rose 2.5 per cent and contributed the most to Sensex gains, followed by Larsen & Toubro, which rose 2.3 per cent.
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