Indian stock markets extended the gains in early afternoon trade after opening strong on Wednesday. BSE Sensex which plunged nearly 400 points yesterday has recovered 338 points so far in the intraday trade today to the day’s high of 31,727.98 points. The value buying in the blue-chip shares such as HDFC, Reliance Industries, ICICI Bank added to the rally. Out of 31 scrips of the benchmark Sensex, 30 were trading higher today and all eleven sectoral indices of NSE were trading in green with gains up to 2.4%. We take a look at 4 reasons which helped the 30-share barometer to jump over 300 points.
Wall Street optimism
Major US stock indexes ended higher on Tuesday after recovering from steep early losses triggered by fears that hostilities in the Korean Peninsula could escalate. The S&P 500 fell as much as 0.66% after U.S. President Donald Trump warned that all options are on the table for the United States to respond after North Korea fired a ballistic missile over a Japanese island in a new show of force. The Dow Jones Industrial Average rose 0.26% to 21,865.37 points, the S&P 500 gained 0.08% to 2,446.3 points and the Nasdaq Composite added 0.3% to 6,301.89 points.
Value buying in blue chip stocks
The shares of HDFC, Reliance Industries, HDFC Bank, ICICI Bank, L&T, Maruti Suzuki, ITC, Tata Motors, Kotak Mahindra Bank and Infosys contributed the most in the index gains. Collectively these 10 stocks alone added over 230 points out of the 309 points upsurge in the benchmark Sensex.
IOC — biggest PSU company — hit 52-week high
Shares of the state-run petrochemical company Indian Oil Corporation hit a 52-week high on Wednesday as the company plans to invest Rs 32,000 crore over next four years to expand its output. The stock of the largest public sector company Indian Oil Corporation rose as much as 4.52% to the 52-week high of Rs 454.25 on BSE. To meet the rising demand for petrochemicals, especially plastics and polymers, largest public sector company Indian Oil Corporation will invest Rs 32,000 crore to ramp up its output by fiscal 2021.
Positive global signals
Asian stocks took their cues from Wall Street’s stronger close, as concerns about North Korea’s firing of a missile over Japan seems to be ease. Markets appeared to have dismissed North Korea’s statement on Wednesday that the test was a first step in military action in the Pacific to “contain” the US territory of Guam. North Korean media reports on the launch lacked their usual claims of technical advances, indicating the test may not have succeeded as planned, Reuters reported.