Ahead of US tariff decision: Sensex recovers on bargain buying

Biggest single-day gain since February 23; Nifty reclaims key 10,200-mark settling at 10,242.65

By: ENS Economic Bureau | Mumbai | Published: March 9, 2018 2:04:44 am
sensex, nifty, share market, share market news, sensex today, stocks, stocks open, market today, bse sensex, nse nifty, business news The Bombay Stock Exchange building in Mumbai. (Express photo by Ganesh Shirsekar/Files)

After falling 1,413 points in the last six sessions in a row, the Sensex zoomed 318 points as risk appetite improved across world markets, with most stocks rising amid improved investor sentiments regarding a potential global trade war.

Led by PSU banks, the 30-share Sensex stayed in the positive zone throughout the session on unabated buying by domestic institutional as well as retail investors and hit a high of 33,439.97. It finally settled at 33,351.57, showing a robust gain of 318.48 points, or 0.96 per cent. This is its biggest single-day gain since February 23, when it had jumped 322.65 points. The index had lost 1,413 points in the previous six sessions on negative domestic as well as global cues.

The broader NSE Nifty reclaimed the key 10,200-mark and touched a high of 10,270.35, before finally settling at 10,242.65, showing a sizeable gain of 88.45 points, or 0.87 per cent. Intra-day, it hit a low of 10,146.40.

Investors said markets benefited from value buying in beaten-down stocks and a firm trend in overseas bourses.

Stocks of PSU banks staged a rebound in late afternoon trade on short-covering.

Vinod Nair, head of Research, Geojit Financial Services, said, “Market reversed from the last six days losing streak as ease in trade war concerns and short covering in PSU banks supported the rally. Mid & Small cap continued to underperform, as investors are still jittery waiting for further ease in valuation.”

“Bargain buying in the PSU banks aided markets’ recovery, though midcaps and small caps continued to underperform the benchmark indices. Central bank meetings should call for cautiousness, and markets will closely follow developments along US import tariffs,” said a dealer.

Jayant Manglik, president, Religare Broking, “Nifty managed to end with decent gains amid volatility, indicating a breather after the recent fall.

It opened with an uptick but selling pressure at the higher level pushed the benchmark lower in no time. However, things improved as the session progressed, thanks to bargain hunting in select index majors after six days of consecutive fall.”

“We feel it’s just a technical bounce and sustainability at higher level seems difficult. Traders shouldn’t jump into the trade … keep a close eye on local developments, mainly related to the PSU banking fraud and upcoming macroeconomic data for cues,” he said.

In stocks, European markets followed Asian peers higher, with the Stoxx Europe 600 Index set for a fourth day of gains.

The dollar strengthened alongside futures for the S&P 500 Index as traders spooked by tit-for-tat trade threats took solace from suggestions that US President Donald Trump’s tariff plan will spare select countries.

The spectre of a global trade war has had markets on edge this week, as Trump’s threats of steel and aluminum tariffs were met with talk of retaliation in China and Europe. Now central banks are in focus, and the ECB’s decision will be followed by the conclusion of the Bank of Japan’s policy meeting on Friday.

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