Sensex posts biggest one-day gain in 10 years. What experts say on today's rally

Sensex ended nearly 1,900 points higher today

Sensex ended nearly 1,900 points higher today

·         Apart from RIL, some financial stocks also staged a big rebound today
·         HDFC Bank, Kotak Bank and Axis Bank surged between 9% and 12%

Indian markets made a big recovery today even as the country went into a 21-day lockdown to curb the spread of coronarivus outbreak. Benchmark index Sensex surged 1,861 points - its biggest gain in over a decade - to 28,535, joining a global rally as US lawmakers and and Trump administration officials reached an agreement on a massive $2 trillion economic stimulus bill to cope with the fallout from the coronavirus outbreak.

The broader NSE Nifty 50 index also rose 6% to 8,297. Analysts say that expectations of a domestic stimulus also supported Indian markets, adding that volatility will remain in the short term.

Shares of Reliance Industries (RIL) led gains, surging nearly 15%. A report on Tuesday said Facebook Inc was in talks to buy a multi-billion dollar stake in the company's telecom unit Jio.

Some financial stocks staged a recovery. The NSE Bank index surged 8%, with HDFC Bank, Kotak Bank and Axis Bank surging between 9% and 12%.
Finance minister Nirmala Sitharaman on Tuesday the government would soon announce a fiscal package to help the economy face the hit from the virus outbreak.

In early session of Day 1 of a 21-day lockdown ordered by the country's Prime Minister Narendra Modi to contain the virus outbreak, stock markets swung between gains and losses. Despite the nation-wide shutdown, stock exchanges continue to function as usual.

Indian equity markets have been battered this month on fears over the pandemic's impact on an already slowing economy sent investors into a selling frenzy.

India so far has reported over 550 cases of coronavirus and 10 deaths. Rupee and bond markets in India were closed on Wednesday for a local holiday.

What experts say about today's rally:

S Ranganathan, Head of Research at LKP Securities
''Market today mirrored the buoyancy displayed by the Dow on expectations of a stimulus package. Although participation by institutional investors was less today, we witnessed broad based strength in large caps and high quality midcaps."

Vinod Nair, Head of Research at Geojit Financial Services.
"The markets rallied after the nationwide lockdown was announced, mainly driven by the financials. Global markets have been trading in the green, driven by expectations of stimulus measures to support the respective economies and not because of any change in ground realities. A much more stable rally can happen only after any news regarding the virus containment comes in."

Rohit Singre, Senior Technical Analyst at LKP Securities
''Nifty managed to close a day on positive note for second consecutive session with super gains. After showing a positive divergence on daily chart, index managed to catch a bull stream. If Nifty manages to hold above 8,200 then we may see some more upside towards immediate resistance of 8,500-8,700 zone and support for index is coming near 8,150-8,000 zone.

"Nifty Bank index closed the day with good gains of 8%. Support for Nifty Bank is coming near 18,000-17,800 zone and resistance is coming near 18900-19300 zone.''

Post a Comment

Previous Post Next Post