NEW DELHI: Indian stock market staged a smart comeback on Friday with the BSE benchmark Sensex posting its biggest point-wise gain in over two years amid global markets’ recovery from the severe selloff in the previous session. The rally was also fuelled by a rebound in the rupee.
Sensex closed Friday’s session 732.43 points, or 2.15 per cent, higher at 34,733.58. Bank and auto stocks as well as Reliance Industries contributed the most to the rally.
In the 30-share index, only TCS closed the day in the red, while 29 others edged higher.
Maruti Suzuki was the top index performer, followed by M&M, Kotak Mahindra Bank, Coal India, Bajaj Auto and IndusInd Bank.
The NSE Nifty registered a rise of 237.85 points or 2.32 per cent to close the day at 10,472.50. In the 50-share index 46 stocks ended in a positive terrain, while four closed lower.
In the sectoral space, only IT and teck indices closed in the red. BSE Auto index was the biggest sectoral gainer. Other sectors that rose inlcuded metals, consumer durables, energy and bank & financials.
The BSE Midcap and BSE Smallcap indices outperformed Sensex with gains of 2.40 per cent and 2.60 per cent, respectively.
Why did the market rise?
- A rise of more than 50 paise in the rupee propelled the indices.
Investor sentiment was buoyed by gains in global shares.
- Global markets clocked their best day in nearly a month. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 2.15 per cent, the biggest in more than two years.
- The fall in crude prices too turned out to be in the favour of the bulls.
- Although crude oil rose to $81 a barrel, it was still on course to log its first weekly drop in five weeks, according to Reuters.
How good were the gains?
- BSE Sensex clocked biggest point-wise gain since March 1, 2016 i.e. in over 30 months
- Besides IT & Metals, all sectors posted gains this week
- In one of the most volatile weeks, Sensex and Nifty gained 1% each
- The advance-decline ratio stood at 10:3, i.e. for every 10 stocks that gained, 3 fell
What did experts say?
Vinod Nair, Head of Research, Geojit Financial Services
Recent drop in valuation kept the stocks attractive while investors may seek more clarity from upcoming quarterly results. Investors are also keen on today’s CPI inflation data in the context of volatility in the rupee and oil prices. Worries about the US Federal Reserve rate hike, US-China trade dispute and political uncertainties in India on account of upcoming state elections may impact sentiment in the short-term.
Jayant Manglik, President, Religare Broking
Market is extremely volatile these days, but indications are in the favour of further rebound in Nifty. We advise focusing on earnings, global markets and currency movement for further cues. Traders should prefer hedged trades in such scenario and maintain extra caution in stock selection.
Source: Economic Times