Sensex reclaims 50,000, Nifty up over 1%; auto and IT stocks shine

The domestic posted strong gains for the second day in a row, thanks to the sharp up-move in automobile and technology stocks. The sentiment was bolstered as the S&P500 index of the US jumped 2 per cent overnight, its biggest-single day surge since June.

Though some pared gains after China’s top banking regulator raised concerns over asset bubbles, the Indian outperformed.

The Sensex added 0.9 per cent, or 447 points, to end at 50,297, while the Nifty50 rose 1.1 per cent, or 158 points, to finish at 14,919. On the other hand, Wall Street’s major averages dipped after a strong start to March as investors closely monitored the bond market, as well as progress on the next round of fiscal stimulus.

ALSO READ: Busy IPO season in March with seven offers worth Rs 12,000 crore

Only six of the 30 Sensex stocks ended with losses. The biggest Sensex gainer was Mahindra & Mahindra, which rose 5 per cent, followed by NTPC and Bajaj Auto, which rose nearly 4 per cent each. IT majors Tata Consultancy Services (TCS) and Infosys added nearly 3 per cent each.

“The Indian market witnessed a positive opening, backed by a strong US market due to steady Treasury bond yields. A quick recovery was seen towards the end of the session as investors hurried to buy on dips, showing confidence and liquidity in the market. An improved outlook post-February auto sales numbers resulted in continued buying in auto stocks, with the IT sector also being a major contributor, “said Vinod Nair, head of research, Geojit Financial Services. After climbing to as high as 1.61 per cent last week, the 10-year US Treasury traded steady at 1.45 per cent. On Friday, the Sensex and the Nifty had crashed nearly 4 per cent amid a flare-up in US bond yields on fears of inflation.

Many commentators said the bond and equity markets’ sell-off was temporary. They added the rise in yields was on account of optimism over growth and not so much due to inflation worries.


“The rise in US Treasuries is unlikely to lead to ‘taper tantrum 2.0’ for Asia either. Unlike 2013, we see a gradual and orderly rise in US real rates, given the Fed’s average inflation targeting. Asia’s mostly improved macro stability conditions also enable it to cope better with a rise in US real rates vs 2013,” said a note by Morgan Stanley, led by Asia economist Deyi Tan. The brokerage said it was in the reflation camp and doesn’t see economic overheating.

The India VIX cooled 8 per cent to end at 23.6. Technical analysts said the market remains in a positive zone.

“A small positive candle was formed with minor upper and lower shadow. Technically, this pattern could be considered as a comeback of bulls from the lows. The further upside from here is expected to result in a reversal of the recent downtrend of the market. The short-term trend in the Nifty continues to be positive and bulls seem to gain strength in the present upside bounce. The crucial overhead resistance to be watched is around 15,065 and a decisive move above this gap area can open chances of new highs for the market,” said Nagaraj Shetti, technical research analyst, HDFC Securities.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Source link