Domestic indices on Tuesday staged their biggest one-day gain of nearly 9 per cent since May 2009 on strong global cues, amid reports that new COVID-19cases were on the decline. The benchmark Sensex skyrocketed by 2,476 points to 30,067.21 and the Nifty Index spurted by 708 points to 8,792.20 in line with the global stock rally.
The rupee also surged by 49 paise to close at 75.64 against the US dollar following the stock market rally.
Analysts said Indian markets opened on a positive note following upbeat global cues in Asian markets as there was a decline witnessed in new Covid cases globally and hopes of the pandemic peaking out gathered pace and substantial liquidity stimulus package announced by Bank of Japan. Reports of another relief package is being readied by the Central government also boosted the sentiment.
“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. In terms of breadth, today’s rally was more broad-based with buying in both frontline and mid-small cap stocks. Almost all the sectors were trading in green in the markets today,” said Narendra Solanki, Head- Equity Research, Anand Rathi Shares & Stock Brokers.
Global cues help, but foreign portfolio investors key
The Sensex witnessed its highest single-day gain on Tuesday, since the 17 per cent jump it had witnessed on May 18, 2009. While the gains in the market replicated those in global markets, foreign portfolio investors turned net positive investors in Indian capital markets for the first time on Tuesday since March 5. While they invested a net of Rs 741.7 crore on Tuesday, between March 5 and April 7, they sold Indian equity and debt holdings worth Rs 1,16,342 crore or around $15.5 billion.
Abhimanyu Sofat, head of Research, IIFL Securities, said, “The rally in the market was driven by positive news about New York and Spanish data on the rate of corona infections. The flattening of the curve would help a risk-on trade in the market. However, for Nifty to go above the 9,000 levels, one would need some additional positive news on domestic front.”
Crude prices have risen as a virtual meeting between OPEC and its allies to discuss production cuts is scheduled to take place on Thursday.
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