scorecardresearch
Follow Us:
Wednesday, April 21, 2021

Sensex breaks losing streak to gain 1.3% on short covering

The Sensex had lost 1,179 points in the previous four sessions (Monday to Thursday) on the back of a rise in bond yields, rising Covid cases and selling pressure by domestic institutions.

By: ENS Economic Bureau | Mumbai |
March 20, 2021 4:40:22 am
The benchmark Sensex rallied 1,271 points from the day’s low of 48,586.93 and closed with a gain of 642 points.

Despite weak cues from global markets, domestic bourses on Friday staged a recovery amid short covering and buying support in select sectors in banking, IT and pharma. The benchmark Sensex rallied 1,271 points from the day’s low of 48,586.93 and closed with a gain of 642 points, or 1.3 per cent, at 49,858.24 and the Nifty50 gained 186 points, or 1.28 per cent, to 14,744.00.

The Sensex had lost 1,179 points in the previous four sessions (Monday to Thursday) on the back of a rise in bond yields, rising Covid cases and selling pressure by domestic institutions.

Close on the heels of the overnight losses in the US equity markets, the local market too opened lower and traded in the red during the first half of the trading session, but swiftly bounced back to a gain almost 1.25 per cent. All the major indices including banking, IT, pharma & healthcare and tech sectors boosted the key benchmark indices. This is in contrast to the fall seen today in the Eastern and European markets.

There could be some amount of short covering given the selling seen earlier this week, and also a marked relief with some improvements due to a fall in the oil prices. “But the issues surrounding higher US yields will continue to be material to the markets in the coming weeks. The Fed sees growth and the Fed sees inflation, and so the yields will go higher — this is something that is heard on the street again and again,” said Joseph Thomas, head of research, Emkay Wealth Management.

This may have consequences for equities, though in a limited way, in the coming days. “The trajectory of the US markets will be closely followed to some extent… and the domestic economy is likely to post an impressive growth of close to 10 per cent in FY 22,” he said.

Vinod Nair, head of research at Geojit Financial Services, said, “The highly volatile domestic markets witnessed a smart recovery from its morning weakness and was swinging between gains and losses during the day owing to strong buying seen in FMCG, pharma and energy stocks.” However, auto stocks were under pressure after the announcement of the government’s new scrapping policy. The unsettling pace of US bond yields and a surge in Covid cases worldwide resulted in the global markets trading deep in the red, he said.

The rupee ended on a flat note against the US dollar on Friday as a stronger dollar offset gains from weak crude oil prices and FII inflows.

A firm trend in domestic equity markets also supported the rupee.

At the interbank forex market, the local unit opened lower at 72.57 against the greenback and witnessed an intra-day high of 72.46 and a low of 72.58.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest Business News, download Indian Express App.

  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
Advertisement
Advertisement
Advertisement
Advertisement
x