Chennai: While things have turned gloomy due to the spread of Covid-19 and the subsequent lockdown which has brought economic activities to a screeching halth, there seems to be some ray of hope, if not sunshine. Investor wealth on Tuesday jumped Rs 7,71,377 crore as markets bounced back after two days of fall, tracking a broad-based rally in global equities.
The Sensex gained 2,476.26 points to close at 30,067.21 after resuming trading on Tuesday. Following rise in equities, the market capitalisation of the BSE-listed firms zoomed Rs 7,71,377.02 crore to Rs 1,16,38,099.98 crore. Equity markets were closed on Monday for ‘Mahavir Jayanti’.
“The bears loosened their grip on the Indian markets on Tuesday as the indices clocked their biggest single-day gain in over a decade. Tracking the buoyant global cues as there are signs of COVID-19 plateauing in certain parts of the globe, the Nifty ended higher by 8.8 per cent at 8,792 points,” Ajit Mishra, vice-president (research), Religare Broking Ltd, said.
Heavyweights Reliance Industries Ltd and HDFC Bank were the biggest contributor in the market rally, rising nearly 12 per cent and 10 per cent, respectively.
All Sensex components ended on a positive note where IndusInd Bank was the top gainer surging nearly 23 per cent, followed by Axis Bank, Mahindra and Mahindra and ICICI Bank.
The 30-share BSE barometer had plummeted 674.36 points or 2.39 per cent to close at 27,590.95 on Friday. Markets rose on Tuesday, largely tracking recovery in global equities.
Indian equities are significantly up today (on Tuesday), following positive cues from global markets, consecutive days of decline in intensity of COVID-19 cases and reports from the banking sector on healthy growth in advances as well as comfortable deposit position.
“However, this big up move is on a smaller base vis- -vis where markets were around three months back,” said Amar Ambani, senior president and head of research, YES Securities.
In the broader market, the BSE Midcap and Smallcap indices rose by 5.40 per cent and 4.13 per cent, respectively.
All the sectoral indices on the BSE also closed with gains led by bank, energy, telecom and healthcare indices.
Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 75.8276 and for rupee/euro at 82.2168. The reference rate for rupee/British pound was fixed at 93.8816 and for rupee/100 Japanese yen at 70.27.
“Recent appreciation seems like a short-term breather for the rupee, considering a rebound in global and local equities has calmed investors’ nerves a bit. However, the bias still remains downwards, considering weak sentiments and that the impact of the virus will be felt in the coming quarters,” said Sugandha Sachdeva, VP-Metals, Energy & Currency Research, Religare Broking.
Sachdeva further said ‘for now, the rupee bulls can contend with the fact that the unit hasn’t breached the crucial level of 76.25. Broadly, the rupee is likely to trade in the 75.40-76.25 band in the near term. If 76.25 mark is breached, rupee looks poised to depreciate towards 77.50 eventually.’
“For time being we can see time and price correction looking at the risk-on mood back after the number of cases is lowering and medical treatment successful. Many equity indices have jumped 5-10 per cent in just a couple of days,” said Devarsh Vakil, head – Advisory (PCG), HDFC Securities.
Vakil further said, “At domestic front, we may see MSCI rebalancing related flow in coming days which could support the rupee”.
Rupee on rise
The rupee surged by 49 paise to close at 75.64 against the US dollar, following a rally in stock markets. At the interbank foreign exchange, the rupee opened at 75.92 and gained further ground to touch the day’s high of 75.60. The Indian unit finally settled at 75.64, registering a rise of 49 paise over its previous close.
(Inputs from PTI)