Sensex snaps 5-day losing streak ends 641 points higher
Moderate contraction in bond yields offered support to domestic equities despite the prevailing concern of rise in daily COVID-19 cases.
It was a perfect roller-coaster ride for investors on the D-Street as the benchmark Indian equities indices sew sawed between deep losses and ending with gains of over 1% as U.S. Treasury yield dipped.
After opening with significant losses, Sensex made a U-turn to snap its 5-day losing steak to end 641 points or 1.30% higher at 49,858. The broader market index Nifty50 surged 186 points or 1.28% to close at 14,744.
NTPC was the top gainer in the Sensex pack, rallying over 4%, followed by HUL, PowerGrid, Reliance Industries, ITC, UltraTech Cement and Bajaj Finance.
On the downside, L&T, Tech Mahindra, Bajaj Auto and Titan were among the laggards.
“Despite weak global cues, domestic equities recovered sharply today after five days of back-to-back fall,” said Binod Modi, Head – Strategy at Reliance Securities.
Notably, a sharp recovery in FMCG, pharma, metals and Reliance Industries helped benchmark indices to recover from initial losses.
All the sectoral indices ended in the green with the Nifty Energy index rose 3%. BSE Midcap and Smallcap indices added 0.4% & 1.3% respectively.
Moderate contraction in bond yields offered support to domestic equities despite the prevailing concern of rise in daily COVID-19 cases, he said, adding that the recent spike in new infections is unlikely to dent the improved prospects of economic recovery meaningfully.
“The Indian equity markets correction have been led by multiple factors which include the rise in US treasury yields, spiking corona cases and overall expensiveness of the Indian market. While the criticality of these factors cannot be ignored, the underlying recovery in corporate earnings and operating performance have been very strong. While the market will see challenges for some time, say till the end of March, but next month onwards, the uptrend will resume. So these are decent levels to accumulate good quality stocks,” said Naveen Kulkarni, Chief Investment Officer of Axis Securities.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a negative note.
Stock exchanges in Europe were also trading with losses in mid-session deals.
Meanwhile, the global oil benchmark Brent crude was trading 1.36% higher at USD 64.14 per barrel.
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