BSE benchmark Sensex rallied over 400 points in early trade on Thursday, led by gains in ICICI Bank, HDFC Bank and Reliance Industries amid positive vibes from global markets and fresh flow of foreign funds.
The 30-share equity index traded 436.79 points or 0.88 per cent higher at 50,238.41, and the broader NSE Nifty was up 131.55 points or 0.89 per cent at 14,852.85 in the early hours of Thursday.
Bajaj Finance was the top gainer in the Sensex pack, rising around 3 per cent, followed by ONGC, M&M, Maruti, ICICI Bank, SBI, HDFC twins and Reliance Industries. Infosys and Dr Reddy’s were the laggards.
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In the previous session, Sensex ended 562.34 points or 1.12 per cent lower at 49,801.62, while Nifty slumped 189.15 points or 1.27 per cent to finish at 14,721.30.
Foreign institutional investors (FIIs) were net buyers in the capital market on Wednesday as they bought shares worth Rs 2,625.82 crore.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the outcome of the US Federal Reserve’s policy meet is very positive for equity markets. “Fed’s accommodative monetary stance is appropriate and will continue through 2023 mean the ample liquidity condition and the low-interest rate will sustain for an extended period of time. The better-than-expected news is the Fed raising US GDP growth to 6.5 per cent and signal at inflation above 2 per cent will be tolerated for some time. These are certainly good news for the bulls,” he says.
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After its two-day policy meeting, the US Fed reassured investors that it expects to keep its key interest rate near zero through 2023. Stock exchanges on Wall Street ended with gains in the overnight session.
A concern in India, however, is the second wave of Covid-19 outbreak in parts of the country, particularly in Maharashtra. India on Thursday recorded 35,871 new Covid-19 cases, the highest single-day rise in over 100 days, which took the infection tally to 1,14,74,605, according to Union health ministry data.
Registering an increase for the eighth consecutive day, the active caseload reached 2,52,364, which accounts for 2.20 per cent of the total infections. The recovery rate further dropped to 96.41 per cent, the data updated at 8 am showed. The death toll increased to 1,59,216 with 172 daily new fatalities.
“Going by experiences, Covid-19 is unlikely to impact the market much,” says Vijayakumar, “The second wave in the US and Europe (much less in intensity) didn’t impact markets.”
Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a positive note in mid-session deals. Global oil benchmark Brent crude was trading 0.76 per cent lower at $67.48 per barrel.
