Sensex jumps over 2,400 pts; rupee shoots up 49 paise

Buying frenzy makes investors richer by `8 L cr

New Delhi: Investor wealth on Tuesday jumped `7,71,377 crore as markets bounced back after two days of fall, tracking a broad-based rally in global equities. The Sensex gained 2,476.26 points to close at 30,067.21 after resuming trading on Tuesday. The rupee on Tuesday surged by 49 paise to close at 75.64 against the US dollar, following a rally in stock markets.

Signs of coronavirus containment in the worst-hit regions of the world led to the best ever absolute gain for the Indian stock market, with the Sensex moving up by nearly 2500 points and battered investors getting richer by Rs 8 lakh crore on Tuesday, which saw market participants rushing to buy heavily oversold blue chips.

The short covering rally in the global market on Monday, with the US market gaining over 7 per cent, and Asia and European markets rallying for the second consecutive day led to frenzied broad based buying in largecap stocks.

The Sensex closed above the 30,000mark, gaining 2476 points, or 8.97 per cent. The Nifty-50 gained 8.76 per cent, or 708 points, closing at 8,792.20. The BSE's market capitalisation soared to Rs 116.38 lakh crore from Rs 108.66 lakh crore on Friday.

However, the rally may not last for long since investors are still cautious; the provisional data showed foreign portfolio investors were net buyers by Rs 741.77 crore while the domestic institutions were buyers by 422.51 crore.

The market opened extremely bullish on overnight US market gains. Deepak Jasani, head-retail research, HDFC Securities, said, "Markets began the shortened week on a decisive note, staging their biggest oneday gain since May 2009. Global stock just Rs markets on Tuesday followed up on Wall Street's Monday rally amid continued signs that the coronavirus outbreak may be peaking in a number of hard-hit places. European markets traded sharply higher on Tuesday as investors hoped that the region could be seeking a plateau in the virus outbreak. Asian stock markets rallied for a second day on Tuesday, and riskier currencies rose, buoyed by tentative signs the coronavirus crisis may be levelling off in New York and receding in Europe."

He said, "In India volumes on the NSE flared up as traders rushed to cover shorts and/or square up their option positions. Defensive and old economy stocks were in demand.”

Expectation of higher foreign investor allocation to Indian blue chips from May due to portfolio rebalancing also led to buying in the index heavy weights, said analysts.

Siddhartha Khemka, head-retail research, MoSL, said, "Market expects MSCI to rebalance MSCI India weight in the emerging market index after India moved into a new regime that increased sector-wise limits for the FPIs.