Benchmark indices Nifty 50 and Sensex snapped their five-session-long losing streak to put a pause to a broad-based sell-off. The optimism in the Nifty 50 comes following the stronger-than-expected US jobs report, which reassured investors of recession fears or a weakening US economy.
At 09:15 am, the Sensex was up 239 points or 0.3 percent at 81,927, and the Nifty was up 86 points or 0.3 percent at 25,101.
US job gains increased in September by the most in six months, and the unemployment rate fell to 4.1 percent, the report showed. On October 4, US stocks rallied on fresh signs of a strong labor market after the jobs report.
Asian stocks rose too, as the report underscored the health of the world’s largest economy and boosted optimism over a soft landing, noted Deepak Jasani, Head of Retail Research at HDFC Securities.
The Reserve Bank of India's Monetary Policy Committee meeting will kick off today, running from October 7 to October 9. Market participants will closely monitor signals from the central bank to see if the RBI aligns with the US Federal Reserve on potential interest rate cuts.
This marks the first MPC meeting since the three new external members - Director of Delhi School of Economics Ram Singh, veteran economist Saugata Bhattacharya, and Nagesh Kumar, director and chief executive, the Institute for Studies in Industrial Development - were appointed.
n the broader market, the BSE Midcap and Smallcap indices recorded gains of over 0.6 percent each, marginally outperforming the benchmarks. Meanwhile, India VIX, often referred to as the fear gauge, slipped 0.3 percent to 14.08. Of the 13 sectoral indices, 12 were in the green. However, Nifty Consumer Durables emerged as the day's sole outlier, falling 0.2 percent.
Over the past few sessions, the headwinds from the rising geopolitical conflict in West Asia coupled with FII flows moving to China soured investor sentiment. The conflict has led to higher oil prices, which further dampened the mood as it could delay the RBI's rate cut prospects.
So far in October, foreign institutional investors have net sold shares worth Rs 30,720 crore over three trading sessions. Analysts expect FPI flows to remain volatile. On the other hand, over the past five sessions, China-dedicated funds have seen staggering inflows worth over $13 billion.
Last week, while the benchmarks tanked four percent, the decline was not limited to just the headline indices, sectors like auto, banks, infra, and energy underperformed. However, the impact on the IT index was minimal due to improved sentiment on revenue and spending after an ease in the US Fed monetary policy.
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