Amidst the festive mood on Wall Street, key indices demonstrated significant growth, rising by an impressive 2 percent over just two trading sessions, with the Nifty 50 index managing to recover the 23,000 level on Friday.
This positive momentum continued into the second day despite persistent uncertainty in the macroeconomic environment. Risk factors noted include high crude oil prices, reaching $117 per barrel, the unresolved conflict between the US and Iran, and concerns related to artificial intelligence trading in global markets.
The BSE barometer, Sensex index, gained another 592 points or 0.79 points during intraday trading, increasing the two-day gain to 1497 points. Simultaneously, its counterpart on the NSE, Nifty 50, reached a daily high of 23,118 points, showing a rise of 181 points or 0.79 percent during the day, with the overall trend over two sessions amounting to 1.8 percent.
What is driving optimism on Wall Street?
Firstly, optimism related to company profitability boosted the overall sentiment. Despite price pressures emerging, the reporting for the current September quarter proved healthy. The investment bank Jefferies noted that the rating upgrade ratio remains above 50 percent for the current quarter. Analysis showed that 56 out of 105 companies analyzed by the global investment bank reported results exceeding expectations. Jefferies also stated that the MSCI India earnings forecast for the 2027 fiscal year was raised by one percentage point to 15 percent as of the current earnings season, although some major companies have yet to publish their data.
Secondly, the slowdown in artificial intelligence (AI) trading contributed to increased investor sentiment favoring traditional Indian IT companies, supported by encouraging second-quarter results. According to Business Standard analysis, the Nifty IT index has risen by 14.8 percent since the beginning of October and is poised to show its largest growth since July 2020. The IT sector holds a substantial share in the Sensex and Nifty benchmarks.
Thirdly, technical analysis indicates market strength. Dwarish Vakil, Head of Primary Research at HDFC Securities, stated that Nifty has finally broken out of the narrow range of 22,400–22,800 that constrained price movement over the last five sessions. He added that the previous local high and the 50-DEMA converge around 23,175, forming a key resistance zone. Meanwhile, the support zone has shifted higher to the 22,650 level, and traders should maintain a positive outlook as long as the index stays above this level.
