The fall in the global crude oil prices from around $125 per barrel to $113 has got some buoyancy into the stock markets around the world. In addition, the stock markets were oversold which led to the bounce back in equity. The Sensex gained 934 points or 1.81 per cent to close at 52,532. The Nifty index gained 1.88 per cent or 288 points at 15,638. The gains were in line with US stock markets since index futures of Dow Jones, S&P and Nasdaq gained. Sensex and Nifty had declined 15 per cent from their peak in the past two months.
Investors globally await a key testimony by US Federal Reserve Chairman Jerome Powell due this week. “Nervousness will remain in markets until inflation stabilises and reverses globally,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
“Medium-term trend is still on the weak side. For Nifty traders, the support has shifted to 15,250 in case of a further fall in markets. As long as Nifty trades above 15,500, the chances of the index hitting 15,750 are bright,” said Shrikant Chauhan, Head of Equity Research, Kotak Securities.
Inflation and recessionary fears
Markets had been crashing for the past few days due to rising crude oil prices and of other commodities the world over. Due to multi-decade-high inflation, global central banks have had to embark upon aggressive rate hikes.
Global research firms have started talking about recessionary fears due to the aggressive rate hikes by central banks. It is one of the key reasons behind the relentless selling pressure by foreign portfolio investors in India.
The largest online retail brokers, Zerodha and Upstox, witnessed a technical glitch that disrupted trading for their clients. Later, both the brokers informed that the connectivity issue was resolved.
The rupee closed higher at 77.98 per dollar against Friday’s closing of 78.07.