Market cheers drop in daily Covid cases

A sharp drop in daily Covid infections to below

3 lakh cases triggered broad-based rally in the market, with investors expecting a return to normalcy sooner than expected before.

The Sensex gained 848 points, or 1.74 per cent, and closed at 49,580 after a bullish start on the first day of a new week. BSE Mid-cap and Small-cap indices also gained over

1.6 per cent each.

The market capitalisation of all stocks traded on the BSE touched a new all time high of Rs 213.64 lakh crore as investors wealth soared by over Rs 3 lakh crore.

The Nifty-50 index too gained 245 points to close at 14,923.15.

The market seems poised to regain earlier highs with NSE's India VIX Index, indicator of market volatility, fell 3.27 per cent from 20.26 to the 19.60 levels. India VIX is at the lowest levels of 2021, as it recorded the lowest close of last 87 trading sessions since January 1, said analysts.

"The Nifty rebounded sharply as domestic coronavirus cases fell below the 3-lakh mark for the first time since mid-April. Extended lockdowns by majority states has helped in curbing the cases. Sentiments turned buoyant that soon restrictions/curbs would be eased once cases decline

further," said Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services.

Domestic institutions were net buyers of equities worth Rs 1,948.48 crore while foreign portfolio investors preferred to book profit and were net sellers of equities worth Rs 2,255.84 crore, as per the provisional data.

"Global cues were weak on the back of poor Chinese retail sales data and resurgence of Covid cases in some Asian countries. Gold scaled to threemonth high as global inflation pressure rises," said Khemka.

Bank stocks led the rally on the bourses as the BSE Bankex closed 3.98 per cent up followed by Auto (1.90 per cent), Metal (1.93

per cent), Power (1.86 per cent) and Realty (1.59 per cent).

Barring telecom, all other sectoral indices closed in the green. The market expects the indices to regain earlier highs with financials leading the gainers list.

"It looks like we are going to head higher from heron; because the authenticity of any move is measured by the quality of participation in it and today the banking space led from the front by giving a humongous intraday rally. When this pocket contributes heavily, the up-move can be considered a genuine one," said Sameet Chavan, chief analyst-technical and derivatives, Angel Broking.