Stock market update: Sensex, Nifty surge in early trade on rally in US markets, foreign fund inflows

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Stock market benchmark indices Sensex and Nifty climbed in early trade on Monday following a rally in the US peers and foreign fund inflows.

Markets began the trade on an optimistic note following the US Fed Chair Jerome Powell's recent speech at the Jackson Hole meeting, where he said that time has come for loosening of policy, indicating possible rate cuts in September, reported news agency PTI.

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The 30-share BSE Sensex climbed 312.33 points to 81,398.54 in early trade. The NSE Nifty rallied 94.15 points to 24,917.30.

Among the 30 Sensex firms, Tech Mahindra, Tata Consultancy Services, Tata Motors, Power Grid, HDFC Bank and Bajaj Finance were the biggest gainers.

ITC, Sun Pharma, UltraTech Cement and Adani Ports were among the laggards.

In Asian markets, Hong Kong quoted in the positive territory while Seoul, Tokyo and Shanghai traded lower.

The US markets ended with significant gains on Friday.

"The Fed chief Powell's clear message of the beginning of the rate cutting cycle will impart further resilience to the ongoing global rally in stock markets," V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said while speaking about the stock market update.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,944.48 crore on Friday, according to exchange data.

Global oil benchmark Brent crude climbed 0.61 per cent to USD 79.50 a barrel.

Jerome Powell's dovish speech at Jackson Hole, where he hinted at a potential rate cut in September has reignited investor optimism, Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said while speaking about the stock market update.

Ajay Bagga, a banking and market expert, said on the stock market update, "A strong market up move in the US markets following the Jackson Hole comments of Fed Chair Powell was expected to help the Asian markets rally as well. However, elevated Middle East tensions have enhanced geopolitical risk today and Asian markets are mixed," reported ANI.

He added, "We expect Indian markets to shrug off this till the conflict is limited to extra-state actors like Hezbollah and not a direct action by Iran. We expect the Indian markets to cross previous all-time highs this week unless geopolitical risks lead to a risk of global selling which is still a low probability event."

Rising for the fourth straight session on Friday, the BSE benchmark ended 33.02 points or 0.04 per cent higher at 81,086.21. The NSE Nifty edged up 11.65 points or 0.05 per cent to close at 24,823.15, registering gains for the seventh session in a row.

(With inputs from PTI and ANI)