Sensex zooms 611 points on global rally; biggest single-day gain since March 2016

The broader Nifty finished at 10,421.40, up 194.55 points, or 1.90 per cent. It touched a high of 10,433.65 points in day trade.

Vinod Nair, head of research, Geojit Financial Services said: “Firm global cues and expectation of ease in domestic inflation to 4.74 per cent excited investors to utilize the bargain opportunity. The fear of global trade war is somewhat factored in the market while increase in US payroll data suggests stability in the economy, which boosted the global trade. Investors are positive on blue chips on expectation of faster recovery. However, mid and small cap witnessed reluctance due to high valuation.”

Some global markets on Monday rose at least one per cent following similar gains in the US on Friday, including a record close for the Nasdaq Composite at 1.79 per cent that followed a strong U.S. jobs report. Japan’s Nikkei finished up 1.7 per cent, Hong Kong’s Hang Seng  climbed 1.9 per cent and South Korea’s Kospi ended one per cent higher. Despite an increase in U.S. hiring last month, wage growth was muted as people rejoined the labor force and so expanded the pool of workers and job seekers — perhaps granting the Federal Reserve a reprieve on having to step in with the cooling measure of higher interest rates.

The US Labor Department said that non-farm payroll employment surged up by 313,000 jobs in February, the biggest gain since mid-2016. Meanwhile, the annual rate of growth in average hourly employee earnings slowed, easing worries about faster interest rate hikes by the Federal Reserve. “Good jobs data and subsequent rise in US equities on Friday has revived risk appetite, with index heavy weights among the top gainers. Nifty was seen bouncing off the 200 day moving average in anticipation of good IIP numbers. State-owned banks and midcaps were reluctant though, and markets look forward to CPI-WPI figures to get further boost,” said an analyst.

Investors lapped up recently battered metal, oil & gas, FMCG, banking, power, infrastructure, IT, auto and capital goods stocks amid fresh capital inflows by foreign funds ahead of key IIP and inflation data to be released after market hours today. Brokers said fresh buying by investors ahead of inflation data to be released after market hours improved the market sentiment.

Jayant Manglik, President, Religare Broking, “the market opened gap up, tracking firm global cues and traded range bound in the first half. However, short covering in the latter half triggered fresh momentum in the latter half and almost all the sectoral indices participated in the move. It was indeed a surprise up-move but sustainability above 10400 will be crucial for further recovery. Participants will react to macro-economic data — IIP and CPI inflation — in early trade on Tuesday.”

The benchmark Sensex has fallen close to 2,600 points, or 7.24 per cent, to 33,307.14 since February 1 this year due to global and domestic cues. Rising bond yields, weak global markets and banking woes have led to the sell-off. Foreign investors started selling in the equity market after Budget presentation in February which also coincided with the rise in bond yields in the US. While Rs 13,781 crore was invested in January 2018, Rs 11,037 crore was pulled out in February.