Snapping a seven-day losing streak, benchmark equity indices gained by about 0.82% on Thursday, tracking a rally across other Asian markets following a stabilisation in global bond markets. Sentiment improved after the US Treasury announced measures to increase buybacks of long-duration debt by at least double, easing concerns over rising global yields.
The Sensex jumped 628.04 points, or 0.82%, to close at 77,537.72, while the Nifty gained 153.55 points, or 0.64%, ending the session at 24,231.85.
In the preceding seven sessions, the Sensex and Nifty had declined by about 2% each, marking their longest losing streak in nearly a year, as concerns over rising oil prices and geopolitical uncertainty continued to weigh on market sentiment.
“Markets found much-needed relief after the US Treasury stepped in to contain the surge in global bond yields, triggering a strong broad-based rebound and ending the domestic market’s week-long losing streak,” said Vinod Nair, Head of Research, Geojit Investments.
The intervention dragged down the dollar, which, along with a firmer rupee and easing yield pressures, boosted the attractiveness of emerging markets, Nair added.
A stronger rupee and short covering following the recent correction further supported the recovery, said Ajit Mishra, SVP – Research, Religare Broking.
However, Brent crude remained elevated near $94 per barrel amid continuing geopolitical tensions and uncertainty surrounding the Strait of Hormuz, keeping inflation and external-sector risks on investors’ radar, Mishra added.
Investors’ wealth rose by Rs 2.71 lakh crore on Thursday, recouping nearly half of the Rs 5.46 lakh crore loss recorded during the preceding seven sessions.
Overall market breadth was positive, with 2,450 gainers against 1,874 losers on the BSE. The broader BSE Midcap and BSE Smallcap indices gained 0.51% and 0.63%, respectively. The recovery was broad-based across sectors, led primarily by realty, IT, FMCG and financial stocks.
Foreign portfolio investors sold shares worth Rs 583.36 crore, while domestic institutional investors purchased shares worth Rs 3,537.71 crore, according to data released by the exchanges.
Sugar stocks were also in the limelight on Thursday, rallying by up to 18% after the government tightened stockholding limits for bulk consumers in an effort to curb record-high domestic sugar prices ahead of the festival season. Among major sugar stocks, Balrampur Chini Mills, Bannari Amman Sugars and Bajaj Hindusthan Sugar gained more than 15%.
Of the 30 Sensex constituents, 26 ended higher. Eternal, Kotak Mahindra Bank, ITC, Bajaj Finance and Axis Bank were among the top Sensex gainers, while Tata Steel, IndiGo, HCL Technologies and Titan Company were the only losers, declining marginally.