Markets join global rally, close at 4-month highs

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Published: June 24, 2020 9:00 AM

The benchmark Sensex rose by 519.11 points, or 1.49%, to close at 35,430.43 whereas, the 50-share index Nifty rose by 159.8 points, or 1.55%, to close at 10,471.

Markets, Indian markets, Donald Trump, US-China trade deal, Nifty, novel Coronavirus,Foreign portfolio investorsThe benchmarks rose for the fourth straight session and ended the day close to their four-month highs.

Indian markets joined the global rally on Tuesday, as markets across the world rallied upon clarification by the United States President Donald Trump that the trade deal between US-China remained intact. The benchmark Sensex rose by 519.11 points, or 1.49%, to close at 35,430.43 whereas, the 50-share index Nifty rose by 159.8 points, or 1.55%, to close at 10,471. The benchmarks rose for the fourth straight session and ended the day close to their four-month highs.

The risk-on sentiment had taken a knock earlier in the Asian trading session after the White House trade adviser Peter Navarro announced that the trade deal between the United States and China was ‘over’. The turning point according to Navarro was when the US came to know about the novel Coronavirus only after the Chinese delegation left the US after signing the January 15 trade deal. US President Donald Trump clarified on Twitter that the US-China trade deal was ‘fully intact.’ Globally, stocks rebounded after the president’s clarification closing their day making gains.

Stock markets in China, South Korea, and Taiwan, closed higher by 0.18% to 0.34%. Hang Seng index, Hong Kong’s benchmark was up by 1.6%. Additionally, European stock markets were also trading higher with benchmark indices in the United Kingdom, France, and Germany, trading higher by 1.08% to 2.07%. The Dow Jones mini futures were up by 203 points, at the time of press, pre-empting an overnight rally in the United States extending Monday’s gains where investors turned bullish on equities amid rising crude oil prices. Brent crude was trading at $43.67 per barrel up by more than 1% since its previous close.

Foreign portfolio investors (FPIs) have bought Indian stocks worth $2.7 billion in total till June 19. On Tuesday, FPIs bought stocks worth $22.34 million, provisional data shows whereas, domestic institutional investors sold stocks worth $60.11 million. According to a report by ICICI Securities, stable or appreciating emerging markets (EMs) currency and near zero rates in developed markets (DMs) augurs well for EM flows.

“‘Liquidity measures’ and ‘record low rates’ by central banks, positive signals on growth post re-opening from Covid-19 lockdown, as well as stability of commodity prices are leading to rising risk appetite,” said the brokerage in its report.

 

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