Indian equities rally in sync with global markets

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Published: May 1, 2020 3:15:03 AM

The European markets at the time of the press were under pressure with markets in France, Germany and the UK down between 0.1% to 0.5%.

The benchmark Sensex gained 997.46 points or 3.05% to close at 33,717.62.The benchmark Sensex gained 997.46 points or 3.05% to close at 33,717.62.

Indian equity markets on Thursday rallied smartly in sync with global markets that gained on the back of encouraging results from a Covid-19 treatment trial. The benchmark Sensex gained 997.46 points or 3.05% to close at 33,717.62. The broader Nifty50 rose by 306.55 or 3.21% to close at 9,859.9.

For Thursday’s monthly expiry on the NSE, the F&O segment witnessed a turnover of Rs 26.71 lakh crore and the cash market saw volumes of Rs 62,933.53 crore. This is against the six-month average of Rs 14.42 lakh crore in the F&O segment and Rs 39,134 crore in the cash market on the NSE. According to experts, the markets are attracting more investors who might not want to miss out on the relief rally. Sanjeev Hota, head of research, Sharekhan by BNP Paribas, said, “Markets could have seen improved volumes since more market participants could be participating in the fear of missing out on the rally but, investors should remain cautious and follow the staggered investment approach as there could be volatility in the market in the coming days.”

Foreign portfolio investors (FPIs) in March had pulled out $8.3 billion and remained sellers in April. However, the extent of selling reduced to $399.6 million till April 29. The provisional data on the exchanges showed that, on Wednesday, FPIs bought $95.5 million worth of equities and domestic institutional investors pumped $10 million into Indian equities. UR Bhat, director, Dalton Capital Advisors (India), said, “FPIs are continuing to sell, but less aggressively than in March. They may not turn into sudden buyers given the Covid-19-related uncertainties and the negative impact on corporate earnings in FY21. The rally after the initial steep fall has extended for five weeks now but the harsh economic realities will most likely bite into this optimism pretty soon.”

The sentiment for risky assets such as equities was holding up globally after Gilead Sciences claimed that it was seeing positive data from trials for the drugs it was developing to treat coronavirus. Additionally, the Federal Reserve reiterated its commitment to keep its accommodative stance which led to Dow Jones ending Wednesday’s trading session 2.2% higher. The Asian markets extended their gains with bourses in Hong Kong, China and Taiwan rising between 0.2% to 2% on Thursday.

The European markets at the time of the press were under pressure with markets in France, Germany and the UK down between 0.1% to 0.5%.

After Thursday’s trading session, the benchmarks Sensex and Nifty have retraced their losses by 29.7% and 29.5%, respectively, from their March 23 lows. The top gainers on the Nifty were Tata Motors, UPL, ONGC, Vedanta and Hindalco up by 19.9%, 14.5%, 13.1%, 12.1% and 11.7%, respectively. The biggest losers were Sun Pharmaceuticals, Hindustan Unilever, Cipla, IndusInd Bank and ITC, down by 2.4%, 1.2%, 1%, 0.66% and 0.60%, respectively. Shares of RIL rose 2.6% to close at Rs 1,464 apiece ahead of its results. Hindustan Unilever’s share price fell by 1.2% to close at `2,205 ahead of its correction. Sectorally, the biggest gainers were Nifty Metal, Nifty Auto, Nifty IT, Nifty Financial Service and Nifty Bank. Most stocks belonging to the automobile sector rallied after some manufacturers decided to restart their operations, Nifty auto ended its day 6.4% higher. The only sectoral losers were Nifty Pharma and Nifty Media. Nifty Midcap and Nifty Smallcap were up by 2% and 0.6%.

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