Dow Jones lead global equity rally

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By S Jha

New Delhi, October 5: With the US treasury yields cooling off, Dow Jones set off a global equity rally, with follow up gains in the Indian and the Asian bourses along with their European counterparts.

After posting a health gain of over two and a half points on Monday, Dow Jones was back again extending the gain with another two per cent rally in the first few hours of trades on Tuesday. Nasdaq was also trending up amid hopes that the October series would be better after the indexes touched the 2022 lows in the last days of September.

After the Monday rout, the Indian stock markets took the cues from Dow Jones and raced with over 1000 points gain, while Nifty also posted a very healthy gain in Tuesday trade. The Indian equity market rally was led by a strong rebound in the private banks, with the likes of IndusInd Bank, HDFC Bank, Kotak Mahindra Bank erasing losses of the last few days. The IndusInd Bank had also been the lead bank to rally in the July and August series.

The Indian equity markets also junked ‘sell on rise’ trend, looking at the Dow Jones Futures, which had been trending up.

The foreign institutional investors which had been net buyers even on Monday sell off again backed up with fresh buys of Rs 1345 crores. The domestic institutional investors who had been net sellers in the Monday session turned a net buyer with the purchase of Rs 946 crores.

The institutional action in the Indian equity markets suggested that the October series began on a positive note, with the markets moving ahead of the US Fed-led gloom on the back of the rate hikes.

The Adani Group of Companies which had hit the lower circuits on Monday amid fears of Credit Suisse and Deutsche Bank coming under financial stress strongly rebounded in line with the overall market trends.

The Indian equity markets had support from all the sectors on Tuesday, with the IT companies following the banking sector. The likes of TCS and Infosys strongly rallied amid hopes that the US market would remain firm for them.

The Indian equity markets will remain closed on Wednesday on account of Dussehra, while they would open on Thursday, which will also be a weekly expiry, and if the Dow Jones stay on strong rally the traders believe that there could be a strong short covering on the Indian bourses.

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