WHY STOCK MARKET SURGED TODAY ?

Bulls rampaged on D-Street as indexes shifted gears to post a rebound on Oct. 4, buoyed by upbeat quarterly updates from India Inc and strong buying in the US and Asian markets. Falling dollar and US bond yields also lifted sentiment. Sensex rallied above 1,100 points and Nifty was placed above the 17,100 mark. The market has been fairly volatile over the last week on global signals, but now that corporate earnings season is underway, analysts are expecting sentiment to improve. Since 2011, Sensex has posted negative returns only twice in the festive month of October, which also marks the start of the third quarter and second half of the fiscal year.
We expect the Nifty50 index to remain above the psychological 17,000 mark.Market breadth preferred winners. In the Nifty 50, 48 stocks gained, led by indusind Bank, Bajaj Finance, Hindalco Industries and TCS. The only two losers were powergrid and Dr. Reddy's Labs. “In the short term, market sentiment has turned positive with a bearish trend in dollar and US bond yields, he said. If this trend continues, foreign institutional investors (fiis) will again become big buyers in India and they will not get stocks cheaply. Financials and autos will once again lead the uptrend as their fundamentals and prospects are strong. Capital goods are likely to join the rally and telecoms are on a strong wicket.
September Quarter Earnings Encouraging earnings reports from companies lifted sentiment ahead of the reporting season for the September quarter. Companies from different sectors reported stable growth, which led to market-wide buying. IndusInd Bank shares rose 5.75% after net advances rose 18% year-on-year in the second quarter. Mahindra and Mahindra Financial Services shares rose 10 percent after the company reported strong September payouts and improved collections efficiency.
Global Cues The Dow Jones closed Monday up 2.66%, its biggest one-day gain in over 3 months, as investors weighed the possibility that the Federal Reserve may be forced to back off from aggressively tightening monetary policy. Other Asian markets were also in a celebratory mood as Japan's Nikkei jumped to its highest level in nearly two weeks on Tuesday. Mainland China and Hong Kong markets are closed for a public holiday.
FII Buying After being net sellers of over Rs 7,000 crore in September, foreign institutional investors or FIIs bought Indian shares worth Rs 590 crore on the first trading day of the third quarter, yesterday. If this trend continues, FIIs will again become big buyers in India and they will not get shares cheaply. Financials and autos will once again lead the uptrend as their fundamentals and prospects are strong. Capital goods are likely to join the rally and telecoms are on a strong wicket.
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