- India’s Sensex recovered ground to finish higher on Wednesday.
- Sensex corrected from record highs on Tuesday, undermined by global risk-aversion and poor Indian PMI data.
- US jobs data and Fed Chair Powell speech eyed after disappointing US ISM Services PMI.
The Sensex 30, one of India’s key benchmark indices, recovered losses and turned positive to close higher on Wednesday.
The Indian index witnessed an impressive turnaround after struggling on the back of weak market sentiment, courtesy of the poor Services PMI releases from India, China and the US.
A rebound in the Indian banking sector stocks saved the day for Sensex traders, as the index clinched fresh record highs.
The Bombay Stock Exchange (BSE) Sensex 30 closed 0.55% higher on the day at 74,088.99, reversing from the all-time high of 74,151.27.
Stock market news
- The main gainers on Sensex were Kotak Mahindra Bank, HCL Tech, Bharti Airtel, Axis Bank and Sun Pharma. Meanwhile, the main laggards were Power Grid, Maruti Suzuki, Ultra Tech Cement, NTPC and JSW Steel.
- JM Financial lost nearly 14% in early trade as the Reserve Bank of India (RBI) directed JM Financial Products Ltd to cease and desist from doing any form of financing against shares and debentures.
- LTIMindtree Ltd and Aramco Digital collaborated to establish a digital and IT services company in Saudi Arabia, focusing on disruptive digital services and industry 4.0 integration.
- Wipro acquired a 27% stake in B2B sales platform SDVerse LLC for $5.85 million in cash.
- Bharti Airtel approved the allotment of 56.8 lakh shares to FCCB holders at a conversion rate of Rs 518 per share.
- Markets were disappointed on Tuesday by an unexpected drop in the Chinese Caixin Services PMI to 52.5 in February while China’s 2024 GDP growth target set at around 5.0% also weighs on risk sentiment.
- Further, the HSBC India Services Purchasing Managers' Index, compiled by S&P Global, fell to 60.6 last month from January's six-month high of 62.0, missing estimates of 62.0.
- The US ISM said on Tuesday that its Services PMI slipped to 52.6 last month from 53.4 in January. A gauge of prices paid for inputs by businesses fell to 58.6 from an 11-month high of 64.0 in January
- The US stock markets tumbled on Tuesday, following weak US economic data.
- Markets are currently pricing in about a 63% chance that the Fed could begin easing rates in June, slightly lower than a 67% probability seen at the start of the week, according to the CME FedWatch Tool.
- It’s a holiday-shortened week for the Indian markets, as they will be closed, in observance of the Mahashivratri festival on Friday.
- The main event risks for markets this week will be the US Federal Reserve (Fed) Chair Jerome Powell’s testimony and the all-important US Nonfarm Payrolls data.
- Another event of note includes the week-long China's National People's Congress (NPC) meeting which could flag new stimulus measures.
Sensex FAQs
The Sensex is a name for one of India’s most closely monitored stock indexes. The term was coined in the 1980s by analyst Deepak Mohoni by mashing the words sensitive and index together. The index plots a weighted average of the share price of 30 of the most established stocks on the Bombay Stock Exchange. Each corporation's weighting is based on its "free-float capitalization", or the value of all its shares readily available for trading.
Given it is a composite, the value of the Sensex is first and foremost dependent on the performance of its constituent companies as revealed in their quarterly and annual results. Government policies are another factor. In 2016 the government decided to phase out high value currency notes, for example, and certain companies saw their share price fall as a result. When the government decided to cut corporation tax in 2019, meanwhile, the Sensex gained a boost. Other factors include the level of interest rates set by the Reserve Bank of India, since that dictates the cost of borrowing, climate change, pandemics and natural disasters
The Sensex started life on April 1 1979 at a base level of 100. It reached its highest recorded level so far, at 73,328, on Monday, January 15, 2024 (this is being written in Feb 2024). The Index closed above the 10,000 mark for the first time on February 7, 2006. On March 13, 2014 the Sensex closed higher than Hong Kong’s Hang Seng index to become the major Asian stock index with the highest value. The index’s biggest gain in a single day occurred on April 7, 2020, when it rose 2,476 points; its deepest single-day loss occurred on January 21, 2008, when it plunged 1,408 points due the US subprime crisis.
Major companies within the Sensex include Reliance Industries Ltd, HDFC Bank, Axis Bank, ITC Ltd, Bharti Airtel Ltd, Tata Steel, HCL Technologies, Infosys, State Bank of India, Sun Pharma, Tata Consultancy Services and Tech Mahindra.
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