Indian stock indexes rose on Thursday on strong earnings from U.S. tech companies, but an energy crisis in Europe and China’s long lockdowns kept the mood cautious, propelling the dollar near two-decade highs as investors seek safety and performance.
The 30-stock BSE Sensex 30-stock index rose more than 200 points to around 57,025, and the broader NSE Nifty index rose above 17,100. Both benchmarks slid nearly 1% on the day. previous session.
On Tuesday, the Sensex had jumped almost 800 points to around 57,356, while the Nifty was up almost 1.5% to around 17,200, after both indexes were down more than 1% on Monday.
This volatility was expected to continue due to fears of global economic growth, the Russian-Ukrainian conflict and a slowdown in demand in China due to surging cases.
Asian stocks rose, with MSCI’s broadest index of Asia-Pacific stocks outside Japan up 0.5%, led by a 1% rebound in Australian stocks from a low of a month of Wednesday.
“The real question is whether this really matters for a sustainable turnaround in otherwise difficult global circumstances,” Vishnu Varathan, head of economics at Mizuho Bank in Singapore, told Reuters.
“Volatility is still high…while not outright fear, apprehension is hard to miss with the lingering uncertainty of war in Ukraine, which continues to threaten more widespread economic pain,” he added.
On Wednesday, Russia’s decision to suspend gas supplies to Bulgaria and Poland rattled European energy markets and rattled global financial markets.
This added to the bad mood of investors already reeling from the outbreak of COVID in China and the renewal of strict restrictions.
Flight-to-safety trades helped the dollar index hit a five-year high of 103.28, and a further push above 103.82 would take it to levels not seen since late 2002.
“With China’s COVID lockdown fears exaggerating upside risks to the dollar, we recognize the possibility of a stronger dollar for longer,” Jane Foley, head of FX strategy at Rabobank, told Reuters.
Among domestic stocks, Nifty’s FMCG index rose 0.8%, led by a 2.5% jump from Hindustan Unilever after the company’s quarterly profit rose to beat analysts’ estimates.
Reliance Industries shares rose 0.7% to record highs after the conglomerate said an investment firm set up by Rupert Murdoch’s son James and former Disney India executive Uday Shankar, would invest Rs 13,500 crore in Reliance’s broadcast business, Viacom18.
Unilever Limited, Sun Pharma, Asian Paints, Infosys, Power Grid, Dr Reddy’s and M&M were among the early winners of the Sensex pack.
On the other hand, the laggards were HCL Technologies, Bharti Airtel, HDFC Bank, ICICI Bank, TCS and Bajaj Finance.
According to the latest stock market data, Foreign Institutional Investors (FIIs) continued to be net sellers, unloading shares worth Rs 4,064.54 crore on Wednesday.
“A clear trend in the markets now, in both developed markets and India, is the preference for value stocks over high-priced growth stocks,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services. , at PTI.
“This partly reflects investors’ risk aversion in the current environment of mounting challenges posed by expected aggressive US Fed tightening and uncertainties stemming from the protracted war in Ukraine,” he added.