After wild week, stock markets soar; near-term bottom rebound debated

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By S Jha

New Delhi, October 17: After the wild swings of the last week, the stock markets decisively fired all cylinders to scare the bears away, as the bulls came roaring back on the Dalal Street on Monday. The last week had seen wild moves on both sides, as the global capital markets sought to make a sense of the direction of the US Fed, which had been hawkish in its singular objective to tame the inflation by hiking the rates.

The global equity and bond markets were also spooked by the newly-elected Prime Minister of the UK Liz Truss whose pedestrian response to the economic crisis added fuel to the raging fire which had been burning the equity market. Faced with the wrath of the capital markets, Truss rolled back her disastrous steps, which also soothed the market.

The HDFC Bank came up a robust result that sent the Bank Nifty soaring. However, the Indian equity markets were indecisive in the early trades, but after the traders made a sense of the quarterly results of the private banks, they came in the market all guns blazing to push the Bank Nifty higher. The rate hikes have turned the banks, including the SBI, into the market leaders in rallying the SENSEX and Nifty.

The likes of ICICI Bank, HDFC Bank, SBI bank led the rally on Monday, while the market behemoth Reliance Industries also joined the party with a handsome gain. While the foreign institutional investors were net sellers in the Indian equity markets, their domestic counterparts heavily bought, taking cues from the quarterly results of the banks.

The American traders last week had been busy debating if they had seen the bottom of the equity market, as Dow Jones is on a roll since Thursday last week. On Monday early trade, Dow Jones was again higher by over two per cent, which gladdened the moonlighting Indian traders, who see the technical charts of the US indices in late evening.

The legendary US trader Mark Minervini stated that the nature of the bear is to open the market strong and fade away in the last hours, while striking a cautionary note and advising more confirmation of a broad based rally on the equity market. The Dow Jones even after four hours of the trading on Monday was higher by 631 points.

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