Stocks soar over 2% on global rally amid growing optimism

MUMBAI: Markets surged over 2% on Wednesday, extending gains for the third straight day as investors took comfort in retreating bond yields in the US and the expanding Covid-19 vaccination drive in India.

The BSE Sensex gained 1,147.76 points or 2.28% to end at 51,444.65, while the Nifty surged 326.50 points or 2.19% to close at 15,245.60.

In other regions of Asia, too, markets ended higher, with

Hong Kong’s Hang Seng index, China’s Shanghai Composite, Japan’s Nikkei 225 and South Korea’s Kospi climbing 0.5-3%.

“Markets across the globe were filled with optimism as the focus shifted from concerns over high valuations to a stronger economic recovery and earnings growth. The Indian market was on a rising streak, echoing the global sentiment. The Nifty bank (index), which had a rough week so far, took a breather and led the rally while consolidation was seen in auto stocks,” Vinod Nair, head of research, Geojit Financial Services, said.

Nervousness is ebbing as well: the India volatility index (VIX) fell 6.41% to close at 22.09 on Wednesday. According to Ajit Mishra, vice-president-research, Religare Broking Ltd, investors are taking comfort from domestic factors such as decent macro data, earnings upgrades and the steady progress of the vaccination drive. “Importantly, the Nifty has reversed last week’s decline, and indications are pointing toward a further surge ahead. We remain cautiously optimistic on the markets and suggest focusing more on the selection of trades,” Mishra said.