key factors impact D-Street today Sensex surges nearly 1,000 points amid broad-based rally

Indian equities jumped sharply on Monday buoyed by strong buying across sectors amid positive global cues. Buying interest in heavyweights such as TCS aided the headline indices' surge, as investors awaited the onset of the earnings season with the financial results of the IT major due later in the day. 

The 30-share benchmark BSE Sensex zoomed as much as 535.32 points to 60,435.69, and the broader 50-share NSE Nifty50 surged to as high as 18,010.05, up 150.60 points from its previous close.

Here are some of the key factors influencing the moves on Dalal Street today

Earnings optimism: Analysts say the market is abuzz with optimism about earnings growth with all eyes on the TCS results and a slew of positive business updates from as Titan, Paytm and Kalyan Jewellers. According to Zee Business research, TCS is expected to report a net profit of Rs 11,270 crore for the October-December period, which translates into a sequential increase of 8 per cent. 

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Positive global cues: Asian markets tracked a positive rally on Wall Street last Friday after data showed a bigger-than-expected increase in US payrolls, as wage increases slowed and services activity contracted. Nonfarm payrolls increased by 2,23,000 last month, according to the US Labor Department, against estimates of 2,00,000, according to Reuters. 

The addition in November was revised lower to show 2,56,000 jobs added instead of 2,63,000 as previously reported. 

Hopes of a slowing pace of rate hikes: Major central banks are hiking benchmark interest rates aggressively in a bid to balance red-hot inflation with economic growth. 

Crude oil: Brent crude oil prices continue to trade below $80 per barrel providing a breather to India, which relies heavily on imports to meet its energy demand. Benchmark Brent crude futures rose 1.2 per cent to $79.5 a barrel on Monday, but remains some 43 per cent below its 2022 peak owing to China relaxing its zero-COVID policy and opening up its borders.

Economic recovery: Optimism on sustained economic activity from the depths of the pandemic continues to drive the market.

Sustained FII outflow: FIIs have net sold Indian shares worth Rs 7,813 crore so far in January, according to provisional exchange data. However, in some respite for Dalal Street, domestic institutional investors (DIIs) have made net purchases to the tune of Rs 2,757 crore during this period. 

Valuations: Many experts have flagged expensive Indian valuations. The Nifty50 EPS stands at 21.5 times, a premium to its long-term average of 17 times.

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