BSE Sensex and Nifty 50 index surged over one per cent, recouping nearly half of the losses made in the previous session.
A sharp increase in COVID-19 daily cases in the country and possibility of larger economic restrictions have already dented investors’ sentiments. Image: Reuters
BSE Sensex and Nifty 50 index surged over one per cent, recouping nearly half of the losses made in the previous session. Market sentiment improved after the Indian government fast-tracked emergency approvals for foreign-produced Covid-19 vaccines on Tuesday. The 30-share index jumped 660 points or 1.38 per cent to 48,544.06, while the broader Nifty 50 index surged 194 points or 1.36 per cent to settle at 14,504.80. Index heavyweights such as Housing Development Finance Corporation (HDFC), ICICI Bank, HDFC Bank, Axis Bank, Reliance Industries Ltd (RIL) and M&M contributed the most to the indices’ gain. Market breadth remained largely in favor of bulls, as 1,938 stocks advanced, while 926 scrips declined. A total of 182 shares remained unchanged. In the broader market, midcaps and smallcaps performed inline with equity benchmarks. S&P BSE Midcap index jumped 1.46 per cent or 287.24 points to end at 19,944, while S&P BSE Smallcap index gained 1.21 per cent or 248.47 points to settle at 20,805.48.
On an auspicious day today we saw a partial reversal of the speculative unwinding witnessed yesterday, Bulls regained the momentum in Afternoon Trade as the see-saw battle between the Virus & Vaccine tilted towards the latter with the approval of the Third Vaccine. The dovish stance of the RBI gained over inflation in the minds of investors as we saw investor interest in BFSI. The broader markets though did see profit-taking in IT & Pathology names today.
Market attempted to pull back from yesterday’s selloff but wasn’t that enthusiastic. IT sector broke the trend due to profit booking as initial Q4 results were in line with expectations not providing enough leeway to a highly valued sector. While Industrial production for February declined by 3.6% primarily due to contraction in the manufacturing and mining sectors. India’s retail inflation for March also rose to 5.52%, however, it did not harm the market sentiment as it was in line with the recent RBI policy forecast. How the lockdowns will affect the economy will determine the trend of the domestic market, in the short-term.
Binod Modi, Head Strategy at Reliance Securities
Domestic equities witnessed brisk rebound towards the second half of sessions after investors took comforts from the announcement that government is fast-tracking approvals for overseas COVID-19 vaccines to improve supply of jabs and speed-up vaccination process. Notably, volatility index softened by over 10% today offering some comforts. A sharp increase in COVID-19 daily cases in the country and the possibility of larger economic restrictions have already dented investors’ sentiments. Further, possibility of lockdown in large states like Maharashtra appears to have made investors risk averse. Additionally, recent weakness in INR, which crossed Rs75 against dollar, may also aggravate investors’ concerns in the near term. However, 4QFY21 earnings began in a strong note with TCS delivering strong earnings performance with encouraging management commentaries. We believe despite today’s heavy profit booking in IT space, IT stocks are expected to rebound in ensuing days.
Ashis Biswas, Head of Technical Research at CapitalVia Global Research
The market witnessed some lackluster movement in the first half of the trading session and an attempt to break the resistance level around the Nifty 50 Index level of 14500. The short-term technical condition appears like a sideways consolidation in the process. Sustaining above 14500 levels, the market to gain momentum, leading to an upside projection till 14800 levels. The momentum indicators like RSI, MACD to show divergence, indicating a likelihood of further consolidation around the current market level.
The week had opened on a low note and sentiments remained downbeat as rising infections and prospects of lockdown led to a retest of March’s lows. But this also prompted bargain hunters to regroup today, keeping Nifty from falling further. Sectoral rotation was seen with IT and Pharma finding funds moving out and into other sectors. The shot in the arm came in the second half of the day, with emergency approvals for foreign vaccines and a new mechanism for trials prompted short-covering in Nifty lifting it to the vicinity of 14500s.