Markets recover, Sensex up 295 pts
Domestic equities managed to log their second gain in the last 10 sessions and recovered from two consecutive weekly declines on Monday. The Sensex surged about 295 points, while the Nifty rose 85 points, as investors turned towards recently battered stocks for value-buying amid positive global cues.
Despite shares rebounding, foreign institutional investors (FIIs) continued to take money off domestic equities. On Monday, they sold shares worth ~8.1 billion, while domestic institutions were strong buyers to the tune of ~13.4 billion. FIIs have sold shares worth ~82.4 billion in the past six trading sessions. Strong corporate earnings and expectations of moderation in retail inflation numbers also added to the sentiment.
Investors heavily bought into recently battered power, realty, capital goods, and banking stocks amid continued buying by domestic funds and retail investors.
On the BSE Sensex, shares of Tata Steel emerged the best performer and climbed 4.22 per cent after the company reported a fivefold jump in third quarter net profit.
“The market reversed from previous day’s losses, owing to positive global cues and expectation of a marginal decline in January Consumer Price Index (CPI)-based inflation today (Monday). Mid- and small-cap indices outperformed the benchmark indices, as investors started accumulating over-sold stocks. The economy is forecast to improve in the longterm, with strong earnings growth,” said Vinod Nair, head of research, Geojit Financial Services.
A firming trend on Asian and European bourses, following a good show by the Wall Street on Friday lifted the mood of investors in domestic markets.
Oil prices were up after sinking on Friday for a sixth straight day and the rupee also appeared to be on the recovery path, adding to revived sentiments.
After opening on a strong footing, the Sensex advanced to hit a fresh high of 34,351.34 on the back of continued buying by domestic funds and retail investors but later declined to 34,115.12 on profit booking. It finally settled 294.71 points, or 0.87 per cent, higher at 34,300.47. The index had lost 407.40 points, or 1.18 per cent, to settle at a one-month low of 34,005.76 on Friday, weighed by weak global stocks.
The broader Nifty, after touching a high (intra-day) of 10,555.50 points, finished at 10,539.75, up 84.80 points, or 0.81 per cent.
Brokers said sustained buying by domestic institutional investors ahead of inflation data improved the market sentiment. Prominent gainers included YES Bank, Power Grid, IndusInd Bank, Hero MotoCorp, Reliance Industries, HDFC, Maruti Suzuki, ONGC, HDFC Bank, Wipro, Bajaj Auto, Asian Paint, and Sun Pharma. But State Bank of India dropped 2.67 per cent, following poor quarterly results.
Sector-wise, the upmove was driven by power (up 1.87 per cent), realty (1.73 per cent), capital goods (1.65 per cent), infrastructure (1.47 per cent), health care (1.18 per cent), auto (1.06 per cent), metal (1.01 per cent), banking (0.68 per cent) and oil & gas (0.62 per cent).