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Friday, February 26, 2021

Sensex breaks 2-day losing streak, soars 834 pts on US stimulus hopes

Analysts said the market ignored news of fresh Covid cases in China and worries over the global economic recovery.

By: ENS Economic Bureau | Mumbai |
Updated: January 20, 2021 5:54:40 am
Indian stock market, Union Budget 2021, Sensex, Kotak Securities, BSE, share market, nse, FII investments, domestic stock market, benchmark Sensex plunging, indian express, business newsDriven by the improved investor sentiment, the market capitalisation of BSE-listed companies is also making new records and is currently at over Rs 194 lakh crore. (File)

After two days of sell-off, markets rebounded Tuesday, with the Sensex jumping 834 points, or 1.72 per cent, amid expectations of a bigger US stimulus and strong cues from other global markets. The Sensex soared to 49,398.29 and the NSE Nifty Index gained 240 points, or 1.68 per cent, to 14,521.15 on sustained buying support.

Analysts said the market ignored news of fresh Covid cases in China and worries over the global economic recovery.

Vinod Nair, head of research at Geojit Financial Services, said, “Bulls took control after two days of massive selloff, tracking positive cues from Asian markets and on expectations of a bigger US stimulus to keep the liquidity alive. Buying was seen across sectors with realty and PSU banks leading the rally.” The current market will get further boost by foreign inflow if additional US stimulus kicks in. However, recent volatility in the market has increased due to concerns over high valuations and bond yields, investors should be watchful, he said.

Analysts said the result season has started well giving encouraging sign. “The vaccination drive is progressing well. Also, the global cues have been positive with expectation of a large fiscal push in the US. The overall sentiment is quite bullish. We expect that the market will now take its next major cue from the Budget. The multiple expansion driven returns will ease out and returns will be linked more to growth from here on,” said an analyst.


Eye on Budget

THE GLOBAL cues have been positive with expectations of a large fiscal push in the US. The he market is likely to take its next major cue from the Budget.

Ajit Mishra, VP-research, Religare Broking, said the markets plunged sharply lower and lost nearly one and a half per cent amid weak global cues. Initially, the benchmark opened marginally in the red tracking unsupportive global markets which further deteriorated as the session progressed. However, recovery in select index majors recouped losses in the middle but not for long.

Meanwhile, the rupee gained 11 paise to settle at 73.17 against the US dollar on Tuesday on the back of rally in domestic equities and weak American currency.

Asian shares ascended on Tuesday as investors bet China’s economic strength would help support growth in the region. European stocks inched higher on Tuesday, sustained by hopes that an economic recovery following the pandemic is not far off.

Wall Street’s main indices rose on Tuesday. At 9:32 a.m. ET, the Dow Jones Industrial Average rose 227.19 points, or 0.74 per cent, to 31,041.45, the S&P 500 gained 29.87 points, or 0.79 per cent, to 3,798.12 and the Nasdaq Composite gained 133.96 points, or 1.03 per cent, to 13,132.46.

Brent crude oil futures rose 73 cents, or 1.3 per cent, to $55.48 a barrel by 1454 GMT after slipping 35 cents in the previous session. US WTI crude rose 17 cents, or 0.3 per cent, to $52.53.

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