Tracking strong global markets, Indian equities rallied today with Sensex ending 2,476 points higher at 30,067, its biggest one-day gain in percentage terms in over 10 years. Today’s rally added about ₹8 lakh crore to investors’ wealth. The broader Nifty today surged nearly 9% to 8,792. Signs that intensity of coronavirus spread is declining in highly affected areas of the US and Europe kept the sentiments upbeat in global equity markets.
Among the Sensex stocks, all the 30 components ended in the green. IndusInd Bank surged 22% to be the biggest gainer. Axis Bank (19%), M&M (15%), ICICI Bank (14%), HUL (14%), Maruti Suzuki (13%), HCL Tech (12%) were among the other top gainers.
In US market, Dow futures were up 3% today, after a 7% rally overnight. The rupee also gained about 50 paise against the US dollar, ending at 75.63 per US dollar.
Market sentiment will continue to be driven by the trend in corona virus cases globally as well as in India, say analysts.
India today reported around 350 fresh coronavirus cases, down from nearly 700 reported in the previous day.
Financials and pharma stocks led the rally today. The Nifty financials and pharma indices both logged over 10% gains each. Pharma sector rallied the most after the government lifted some restrictions on the export of 24 pharmaceutical ingredients and medicines made from them.
Shares of FMCG major Hindustan Unilever Ltd (HUL) today surged to a new high when the stock rose 14%.
Here is what market experts said on today’s rally:
Vinod Nair, Head of Research at Geojit Financial Services.
“Aided by news that the infections were peaking in some of the worst affected areas around the world, the Indian markets in sync with the global markets, witnessed a relief rally. Investors are also awaiting an ease in lockdown procedures, so companies can get down to generating business. In a holiday shortened week, any news regarding peaking infections will be bought into. Defensives like pharma and FMCG, which has witnessed the least disruption in their business, will continue to be favored.”
Sundar Sanmukhani, Head of Fundamental Research Desk, Choice Broking.
“Signs that intensity of coronavirus spread is declining in highly affected areas of the US and Europe kept the sentiments upbeat. Pharma sector rallied the most after the government lifted some restrictions on the export of 24 pharmaceutical ingredients and medicines made from them. Market sentiment will continue to be driven by the trend in corona virus cases globally as well as in India.”
Amar Ambani, Senior President and Head of Research, YES Securities
“Indian equities are significantly up today, following positive cues from global markets and reports from banking sector on healthy growth in advances as well as comfortable deposit position. A rally on the Nifty to 10500 is possible in the next four weeks, where it will face still resistance. The year 2020 will continue to see high volatility even in the aftermath of the health crisis. It will be a great time to lap up stocks with a 3-year horizon but only after sufficient liquidity is kept aside for emergencies.”