What’s driving Sensex, Nifty surge: Global sentiments after US payroll data, buying by FIIs

While the 30-share BSE Sensex rose by 623 points, or 1 per cent, to 61,677.08, the broader Nifty jumped 169.5 points, or 0.94 per cent, to 18,238.5 in early morning trade.

What does the US payroll data show?

The data released on May 5 showed that the total non-farm payroll employment in the US rose by 253,000 in April compared to 185,000 in March.

“Cues from the mother market of the US indicate that the fears from the regional banking crisis are receding. The April US jobs data, which came at a much better-than-expected 253,000 jobs reflect a strong economy which may even avoid a recession,” Geojit Financial Services Chief Investment Strategist V K Vijayakumar said.

Even the unemployment rate in the US edged down to 3.4 per cent in April from 3.5 per cent in March, which builds up the case of a prolonged pause by the US Federal Reserve instead of a rate cut, Bank of Baroda in its research note.

“The unemployment rate changed little at 3.4 percent… [and] employment continued to trend up in professional and business services, health care, leisure and hospitality, and social assistance,” the US Bureau of Labor Statistics reported on May 5.

So which stocks led the rally on Monday morning?

The gains in the stock market were driven by a rebound in banking and financial stocks, which saw heavy selling on May 5, led by the fall in the HDFC twins, HDFC Bank and HDFC Ltd.

The bank Nifty rose 1.39 per cent, or 593.5 points, to 43,253.9. Among the top gainers on the Nifty 50 were IndusInd Bank, Bajaj Finance and Bajaj Finserv that rose 4.91 per cent, 2.62 per cent and 2 per cent, respectively, in early trade.

HDFC Ltd was trading at Rs 2,740 apiece, up 1.44 per cent while HDFC Bank rose 1.35 per cent.

In the last seven trading sessions, FIIs have cumulatively bought equity worth Rs 11,700 crore from the domestic market.