The stock markets made a strong comeback on Wednesday and jumped by 323 points to regain the 28,500- level followed by value-buying in recent beaten-down stocks such as Sun Pharma, while a Rajya Sabha panel endorsing the GST bill also supported the rally.
The NSE index gained 1.22 pe rcent, while the BSE index ended the day 1.15 per cent higher; their highest close since April 16.
The market sentiments also got a boost with improved rains and declining global crude prices that boosted hopes of a rate cut by the Reserve Bank next month.
Sun Pharma’s shares on Wednesday recovered on value-buying and surged 3.35 per cent to Rs 833.05 after tumbling 15 per cent in Tuesday’s trade.
RIL topped the list of gainers by surging 4.26 per cent on buying by participants on hopes of a strong earnings to be released on Friday. Other gainers included M&M, Bajaj Auto, HDFC, HUL, Tata Steel, Wipro, Cipla, NTPC, HDFC Bank, GAIL, ONGC, Coal India, Maruti Suzuki and Hero MotoCorp.
Among sectoral indices, BSE oil&gas index gained the most by soaring 2.36 per cent, followed by Banking 1.45 per cent.
In commodities, brent oil has now fallen nearly 10 per cent in July. India imports more than 75 per cent of its crude. Brent crude for September delivery was trading lower at $56.51 a barrel.
Globally, other Asian markets ended lower, while European stocks were down in their early trade on weak corporate earnings concern.
Experts on stock markets performance
Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Despite a difficult start to the monsoon session of Parliament, the market has moved higher. Post the submission of the Parliamentary panel report, the market hopes that GST bill may be passed in the Rajya Sabha. Moreover, the market would also be influenced by Q1FY16 results of large caps which will be announced in next few days.
Traders got some support with Goods and Services Tax (GST) panel submitting its report to Rajya Sabha, proposing three modifications related to clause 12, 18 and 19. There is a strong possibility of passage of the GST Bill during the ongoing monsoon session of Parliament given ‘broad consensus’ among political parties.
Traders remained in euphoric mood for most part of the day, holding the gains despite intermittent mild profit booking at higher levels, but once after gaining momentum there was no looking back and both the major indices posted triple digit rally, with Nifty reclaiming the crucial psychological level of 8600 and ending near the three months closing high.
Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Market on Wednesday opened with a positive gap and traded sideways till noon, later sustained buying led by the heavy weigh stocks helped the market to stay above 8600; selective counters witnessed short covering which also supported the markets.
Nifty closed at 8633 up around 104 point. The market breadth was positive as there were seen 1763 stocks advancing against 1060 stocks declining. The Nifty volatility index, India VIX stood at 15.1300 up around 0.21%. The mid-cap and small cap sector also closed up around 1.37% and 0.88% respectively.
Barring the IT sector which ended down around 0.53%, all other sectors closed in green. Oil & gas and Banking were the gainers, which closed up around 2.40% and 1.44% respectively.
The gainers in the stocks’ front were ZEEL and Reliance, closed up around 5.22% and 4.38% respectively. Selling was seen in Lupin and Idea which ended down around 3.41% and 1.67% respectively.
The FIIs turned to sellers after a couple of days, were net sellers in the cash market segment on 21 July 2015, Tuesday, sold shares worth Rs 226.88 crore. The DIIs on the other hand were buyers on 21 July, bought shares worth Rs 146.32 crore in the capital markets segment.
The European markets fell today also as of the weak earnings from the US front. The US index futures were also down. Tomorrow companies like Bajaj Auto, Wipro, Biocon, Lupin, TTK Prestig, SBT, Granules and McDowell-N may announce their earnings.
There was some support to the markets, with the government extending the interest subvention scheme to banks to ensure availability of crop loans of up to Rs 3 lakh to farmers at 7 percent per annum.
Oil & gas was the major gainer with sector heavyweight Reliance Industries surging over 4%. Strong buying was also seen in banking stocks that had witnessed selling pressure in the previous 3 sessions.
Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
Indian stocks swung back viciously as yesterday’s falls were deemed overdone, and investors hunted for value amid the price falls. It also helped that proposal to amend Land Bill so as to give more flexibility to States, were seen favourably. The GST panel’s recommendation to prevent cascading effect of the 1 percent inter-state tax was also taken in well. Meanwhile, US existing home sales data and manufacturing PMI data scheduled for release in these two days, would also be watched for insight towards FOMC action when it meets this 28th-29th.
The realty sector too kept buzzing, after a unit of the New York-based private equity firm Warburg Pincus, in a biggest deal in India’s real estate sector announced to invest $284 million for a minority stake in Piramal Realty, the real estate development arm of Piramal Group. Metal pack that was in somber mood in early deals too recovered, despite decline in base and precious metals in global markets and fear of poor earnings announcements from some of the resource majors.
Gaurav Jain, Director, Hem Securities
Expectations of passing of GST (Goods & Services Tax) Bill in Rajya Sabha with modifications as recommended by select panel cheered the D-Street. Indices after yesterday’s carnage took the indices higher on the back of short covering. Strengthening of rupee also boosted investors confidence.
The top gaining sectoral indices on the BSE were Oil & Gas up by 2.43%, Bankex up by 1.42%, PSU up by 1.27%, INFRA up by 1.25%, Auto up by 1.13%, while IT down by 0.45% and TECK down by 0.36% were the losing indices on BSE.
The top gainers on the Sensex were Reliance Industries up by 4.42%, Mahindra & Mahindra up by 3.38%, Sun Pharma Inds. up by 3.15%, Bajaj Auto up by 3.07% and Hindustan Unilever up by 2.88%. On the flip side, Lupin down by 3.65%, Bharti Airtel down by 1.47%, TCS down by 1.32%, Infosys down by 1.09% and Vedanta down by 0.59% were the top losers.
The top gainers on Nifty were Zee Entertainment up by 5.22%, Reliance Industries up by 4.38%, Mahindra & Mahindra up by 3.34%, Sun Pharma Inds. up by 3.34% and Bajaj Auto up by 3.27%. On the flip side, Lupin down by 3.41%, Idea Cellular down by 1.67%, Bharti Airtel down by 1.24%, TCS down by 1.19% and Infosys down by 1.14% were the top losers.