The benchmark Sensex on Wednesday surged 350 points on positive global cues in the wake of favourable comments by the US Federal Reserve and reports that spread of the coronavirus cases has been contained.
Led by FMCG stocks, the 30-share BSE Sensex soared 349.76 points, or 0.85 per cent, to close at 41,565.90. Similarly, the broader NSE Nifty jumped 93.30 points, or 0.77 per cent, to 12,201.20.
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Analysts said domestic equities took positive cues from the global markets which rose on optimism that spread of the coronavirus has been contained. China on Wednesday reported its lowest number on new coronavirus cases since late January as authorities scrambled to contain its spread. However, WHO head Tedros Adhanom Ghebreyesus had on Tuesday said that although 99 per cent of cases are in China, where it remains “very much an emergency,” it also “holds a very grave threat for the rest of the world.”
US Federal Reserve Chairman Jerome Powell on Tuesday signalled that the central bank would hold interest rates steady for now while the risks to the US economic outlook remain.
Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services, said: “Equity markets continued its positive movement on account of positive global cues. With fears abating with regards to coronavirus spread and the Fed chairman’s optimistic view on the economy, the global sentiments got a boost.”
Investors were also awaiting inflation and factory output data, scheduled for release later in the day, traders said. “Investors’ appetite for risk improved as coronavirus concerns receded for the second day in a row. The impact of coronavirus has already affected the supply chains and factory activities across the globe, but the ground reality is improving in China and we can expect improvement in the next quarter. The domestic market is awaiting the January inflation and consensus show a spike in inflation which is expected to impact rate-sensitive stocks,” said Vinod Nair, head of research, Geojit Financial Services.
HUL, the top gainer in the Sensex pack, gained 5 per cent, followed by Kotak Bank, Nestle India, ICICI Bank, Mahindra and Mahindra, Asian Paints and RIL. On the other hand, SBI, IndusInd Bank, Sun Pharma, Ultratech Cement, PowerGrid and NTPC fell up to 1.34 per cent. Shares of IDBI Bank tumbled over 6 per cent on disappointment over the lender’s December quarter earnings. The scrip plunged 6.08 per cent to close at Rs 34.75 on the BSE.
BSE FMCG, bankex, energy, IT, metal, teck and auto indices rose up to 1.90 per cent, while power, realty, consumer durables and capital goods fell up to 0.96 per cent. However, the broader BSE midcap and smallcap indices underperformed the benchmarks, shedding up to 0.29 per cent.
The rupee ended 5 paise lower at 71.33 against the US dollar on Wednesday as forex market turned cautious ahead of key macro data release. Besides, higher crude oil prices and strengthening of the American dollar against key currencies also put pressure on the domestic unit.
US Fed comments also supported the global markets. “The FOMC (Federal Open Market Committee) believes that the current stance of monetary policy will support continued economic growth, a strong labor market, and inflation returning to the Committee’s symmetric 2 percent objective,” Powell said.
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