Sensex zooms 610 points in biggest gain in a year
MUMBAI: Indian stocks climbed nearly 2% on Monday, their biggest daily gain in a year, as worries over trade wars eased and firm jobs data pushed up US stocks. The BSE Sensex rose 610.80 points or 1.83% to 33,917.94, while the 50-share Nifty index closed 194.55 points or 1.90% at 10,421.40 points.
Analysts said short-covering drove Monday’s rally as the markets looked oversold. “In the last few days, India has been underperforming among emerging markets. Data points favour growth environment. Rise in direct tax collection shows growth is reviving and goods and services tax (GST) effect of widening of taxation seem to be working,” said Vinod Karki, vice-president (strategy) at ICICI Securities Ltd.
According to him, markets are expected to be range-bound while time corrections will ensure that valuations become attractive, after which the rally will resume. “This is a consolidation phase for the markets rather than deep sharp corrections as growth indicators look supportive. Nervousness will continue until general elections next year,” he added.
Most Asian markets gained almost 1% following optimism on the jobs front. Strong economic indicators have given a fresh impetus to the bull market in global equities that is now nine years old.
Ravi Gopalakrishnan, head of equities at Canara Robeco Mutual Fund said, “The markets’ rise is mostly due to a bounce-back after the sharp sell-off we saw in February. Unless there is no change in the fundamentals of the markets and earnings improvement, nothing much is going to change while investors are likely to be on the edge ahead of the elections. Earnings trajectory is expected to pick up by FY19.” Meanwhile, foreign investors have started to buy Indian equi- ties after the heavy selling in February. Foreign institutional investors have bought Indian shares worth $316.39 million so far in March while domestic institutional investors (DIIS) have pumped in ₹127.78 crore. Sectorally, autos, FMCG and metals stocks outperformed while PSU Private Bank index was down 0.47%.
Analysts said Indian markets will focus on key macro data expected to be released this week. India’s industrial output grew 7.5% in January from a year earlier while retail inflation eased for the second straight month in February to 4.44%, as food prices fell.
Bloomberg contributed to this story.