Bulls roared on Tuesday as domestic benchmark indices Sensex and Nifty posted the best trading day in percentage terms since May 2009, and biggest single-day gains in absolute terms. The rally on Dalal Street was supported by the positive global cues and news flow on coronavirus. Headline index S&P BSE Sensex reclaimed its psychological level of 30,000, while broader Nifty 50 index topped 8,800-mark today. "Indian markets followed upbeat global cues in Asian markets as there was some decline witnessed in new COVID cases globally," Narendra Solanki, Fundamental Research Head, Anand Rathi Shares and Stock Brokers told Financial Express Online. Further, markets also rose on hopes of COVID pandemic peaking out gathering pace and substantial liquidity stimulus package announced by Bank of Japan, he said. "During the afternoon session markets further gained traction as investors cheered reports that the Finance Ministry is working on a second relief package for the Indian economy to mitigate negative impact due to COVID-19," Narendra Solanki said.
Sensex reclaims 30,000: S&P BSE Sensex gained 2,476 points or 8.97 per cent at 30,067, while the broader Nifty 50 finished at 8,785, up 702 points or 8.69 per cent.
IndusInd Bank top Sensex gainer: All the 30 Sensex stocks ended in green today with IndusInd Bank as the top gainer with a growth of 22.60 per cent, followed by Axis Bank, M&M, ICICI Bank and Hindustan Unilever (HUL).
Nifty Private Bank index jumps 11%: All Nifty sectoral indices traded in positive territory with Nifty Private Bank index as the top sectoral gainer, up 11.07 per cent driven by IndusInd Bank, Axis Bank and ICICI Bank. Similarly, Nifty Bank index closed 10.43 per cent higher with Aurobindo Pharma, Dr. Reddy’s Laboratories and Cadila Healthcare as top index gainers.
What fuelled markets today: The key factors behind today’s rally were positive global cues, expectations of the stimulus package in India. "Market Breadth was in favour of bulls. For every loser, there were more than seven gainers. All major sectors participated in today’s rally led by Banking, Auto and Pharma. India VIX contracted further to reach the levels of 51.80. Indian Rupee also managed to gain lost ground and it was trading near 75.60 against US dollar," Vishal Wagh, Research Head, Bonanza Portfolio Ltd, said. Today’s rally was more of broad-based with buying in both frontline and mid-small cap stocks, says Solanki.
MSCI rejig: Market anlaysts believe that one of the reason behind the bull run on D-Street was the rebalancing on MSCI index. MSCI India's weightage in emerging markets could rise up to 55 basis points to inch up to 8.1% from the current 7.6%, resulting in passive inflows of over $1.4 billion (about Rs 10,000 crore) and active inflows of $5.7 billion (about Rs 43,000 crore), said a research report by Morgan Stanley. "MSCI changes, under ownership in pharmaceuticals and support from Financials, culminated the stellar day in favour of the bulls," S Ranganathan, Head of Research at LKP Securities, said.
What to expect on Wednesday: Analysts suggest volatility in markets. "We expect the next few sessions to remain volatile. Meanwhile, investors must opt for value-buying in select pockets of the Indian markets (FMCG, pharma, consumer durables) to build a long-term portfolio, Ajit Mishra, VP – Research, Religare Broking Ltd, said.