Nifty and Sensex gear up for a cautious start to the week

Source Fxstreet
  • India’s Nifty and Sensex look to open the week on a cautious note this Monday.
  • Nifty and Sensex cheered global optimism last week, as soft US Retail Sales rekindled dovish Fed expectations.
  • Nifty and Sensex traders brace for a relatively light India’s economic docket and Fed Minutes from the US.  

The Sensex 30 and Nifty 50, India’s key benchmark indices, are poised to open the week on a mixed note on Monday, having logged a weakly gain. The Indian indices look to consolidate the previous week’s upward trajectory, led by an upsurge in banks and auto sector stocks and weak US Retail Sales data-driven dovish Fed expectations.

The National Stock Exchange (NSE) Nifty 50 added 0.59% on the day to settle just below the all-time high of 22,126. The Bombay Stock Exchange (BSE) Sensex 30 gained 0.52% to close just shy of the 72,500.

Chinese markets reopened after a week-long Lunar New Year holiday while the US stock markets are closed on Monday, in observance of Presidents’ Day.

Stock market news

  • SBI Life Insurance, Mahindra & Mahindra, Bajaj Auto, WIPRO, Adani Ports were the top gainers on the Nifty on Friday while losers included Apollo Hospitals, Brittania, Power Grid, SBI Bank, NTPC and Reliance Industries.
  • Among the corporate news, Volkswagen and Mahindra & Mahindra signed pact for electric vehicle components.
  • Paytm snapped its three-day decline to close at the 5% upper circuit.
  • Zerodha Fund House launched Zerodha Gold ETF.
  • Foreign investors in the last two days have sold equities worth Rs. 6,993 crore.
  • On Thursday, Nifty and Sensex drew support from upbeat Indian data and impressive gains in the automobile and utility sector stocks.
  • India’s trade data for January showed Thursday a shrinking Trade Deficit of $17.49 billion.
  • US Retail Sales declined by 0.8% in January, the US Census Bureau reported on Thursday, worse than the market expectations for -0.1%.
  • On Wednesday, the Indian WPI inflation dropped to 0.27% in January, as against a 0.73% increase in December. The data missed the market consensus of 0.53%.
  • Attention now turns toward the Minutes of the Fed February meeting due on Wednesday, as the Indian economic calendar remains devoid of any top-tier data release.

Nifty 50 FAQs

What is the Nifty 50?

The Nifty 50, or simply Nifty, is the most commonly followed stock index in India. It was launched in 1996 by the National Stock Exchange of India (NSE). It plots the weighted average share price of 50 of the largest Indian corporations, offering investors comprehensive exposure to 13 sectors of the economy. Each corporation's weighting is based on its “free-float capitalization”, or the value of all its shares readily available for trading.

What factors drive the Nifty 50?

The Nifty is a composite so its value is dependent on the performance of the companies that make up the index, as revealed in their quarterly and annual results. Another factor is government policies, such as when in 2016 the government decided to demonetize 500 and 1000 Rupee banknotes. This led to a temporary cash shortage which negatively impacted the Nifty. The level of interest rates set by the Reserve Bank of India is a further factor as it determines the cost of borrowing. Climate change, pandemics and natural disasters are also drivers.

What are the key milestones for the Nifty 50?

The Nifty 50 was launched on April 22, 1996 at a base level of 1,000. Its highest recorded level to date is 22,097 achieved on January 15, 2024 (this is being written in Feb 2024). The index first closed above the 10,000 level on October 17, 2017. The Nifty recorded its biggest daily decline on March 23, 2020 during the Covid pandemic, when it fell 1,125 points or 12.37%. The Nifty’s biggest gain in a single day occurred on May 18, 2009, when it rose 651 points after the results of the Indian elections.

What are some of the major companies in the Nifty 50?

Major corporations in the Nifty 50 include HDFC Bank, Reliance Industries, ICICI Bank, Tata Consultancy Services, Larsen and Toubro, ITC Ltd, Housing Development Finance Corporation Ltd and Kotak Mahendra Bank.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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