Markets soar amid stimulus hopes abroad
MUMBAI: Reversing two days of heavy losses, the Sensex posted its biggest jump in almost four months on Tuesday as investors returned to buying mode amid expectations of fresh stimulus in the US and other economies.
A recovering rupee and persistent foreign capital inflows further buoyed sentiment, traders said. The 30-share BSE Sensex soared 834.02 points or 1.72% to close at 49,398.29. It was its biggest single-day gain since September 25, 2020, when it had climbed 835 points.
Similarly, the broader NSE Nifty rallied 239.85 points or 1.68% to finish at 14,521.15.
Bajaj Finserv was the top gainer in the Sensex pack, jumping 6.77%, followed by Bajaj Finance, HDFC, L&T, ICICI Bank, Sun Pharma and NTPC.
HDFC twins, Reliance Industries and ICICI Bank accounted for almost half of the benchmark’s gains. Only three Sensex components closed in the red— Tech Mahindra, ITC and M&M, shedding up to 0.54%.
Global equities were on an upswing after US President-elect Joe Biden’s nominee for treasury secretary, former Federal Reserve chair Janet Yellen batted for more measures to fight the recession and avoid an even worse downturn.
In testimony prepared for her confirmation hearing on Tuesday before the Senate Finance Committee, Yellen said more aid is needed to get coronavirus vaccines distributed and help families struggling with job losses stay fed and housed.
“Bulls took control after two days of massive sell-off, tracking positive cues from Asian markets and in expectation of a bigger US stimulus to keep the liquidity alive. Buying was seen across sectors with realty and PSU banks outshining. The current market will get further boost by foreign inflow if additional US stimulus kicks in. However, recent volatility in the market has increased due to concerns over high valuations and bond yields, and investors should be watchful,” said Vinod Nair, head of research at Geojit Financial Services.
All sectoral indices ended with gains too.