After the 364-point crash on Tuesday, the Sensex on Wednesday bounced back by over 244 points on the back of better-than-expected corporate earnings and firm global cues. The Sensex, after a strong opening, advanced to hit a high of 31,978.89, before settling at 31,955.35, a gain of 244.36 points, or 0.77 per cent. The 50-share NSE Nifty stayed in the positive zone and retook the 9,900-mark to hit a high of 9,905.05 as buying paced up towards the fag end. It settled higher by 72.45 points, or 0.74 per cent, at 9,899.60.
The rupee also rose by 5 paise to end at a near six-week high of 64.28 against the US dollar on steady selling of the American currency by banks and exporters. This is the highest close for the rupee since June 9 when it had settled at 64.24 against the US dollar.
According to analysts, foreign dollar inflows and positive global cues boosted the sentiment. The market opened positive on overnight earnings numbers of FMCG major Hindustan Unilever coupled with a firming trend in Asia, tracking another record close at Wall Street. Vinod Nair, Head of Research, Geojit Financial Services, said, “the market is recovering from yesterdays languish trading while investors are likely to give focus on stock specific to overcome the risk of premium valuation. Pharma sector outperformed followed by a series of US FDA approvals which offered bargaining opportunity to investors. Trumps failure to repeal Obamacare and strengthening rupee will keep the outlook intact.”
According to Jayant Manglik, President, Religare Securities, Nifty recovered strongly after yesterday’s fall and retested 9900, thanks to favourable local cues and supportive global markets. “It started with an uptick and buying in select index majors pushed the index higher buying was witnessed across the board and the market breadth too settled on firm note. This recovery shows that bulls are in full control and likely to push the markets higher. However, we’re seeing selective buying now and thus suggest continuing stock specific trading approach,” he said.
“Earnings season has just begun and it holds the key for the next directional move… so closely watch the announcements for further cues,” he said. “Banks continue to remain expectant, while pharma has found defensive buying, helped by positive FDA observations, helping markets to put GST shocks behind. Stock specific moves have now become more dominant with earnings beginning to flow in,” said an analyst.