Sensex Soars 612 Points, Nifty Settles Above 15,000 as Covid Cases Wane

Equity benchmarks Sensex and Nifty on Tuesday settled above the levels not seen in over two months as economic recovery hopes amid continuous decline in fresh Covid-19 cases further perked up investor sentiment. 

Recapturing the 50,000-level milestone, the BSE Sensex soared 612.60 points or 1.24 per cent to settle at 50,193.33. This was the highest closing for the index since March 16.

“The fall in the total number of Covid cases across the country below the three-lakh mark, and the likely enhanced availability of vaccines in the coming weeks, helped repair the sentiment to a certain extent,” said Dr Joseph Thomas, Head of Research, Emkay Wealth Management. 

According to Thomas, there is a perceptible preference for quality mid-cap and small-caps which is reflected in the gains in these segments lately. Significant gains were registered by auto, consumer durables, consumer discretionary and industrials. “The market may focus on the sustainability of the gains in the fight against the pandemic, and also the numbers around the price level in the light of rising fuel prices, to get more comfort on the growth front,” he said.

The NSE Nifty went past the psychological 15,000-mark. At the closing bell, the NSE gauge quoted higher by 184.95 points or 1.24 points at 15,108.10 – the best closing since March 10.   

"Domestic equities extended gains as early sign of decline in Covid-19 daily caseload and improving prospects of faster economic recovery emboldened investors," said Binod Modi, Head Strategy at Reliance Securities. Strong cues from Asian markets also supported the rally in domestic market, he added. 

Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended on a positive note. Stock exchanges in Europe were also trading with gains in mid-session deals.

The upbeat sentiment in the market drove the rupee up 17 paise to close at a seven-week high of 73.05 against the US dollar on Tuesday, extending its gaining streak to the third straight session on positive domestic equities and weakening of the American currency in the overseas markets.

"The rupee gained for the third day in a row to the highest in almost seven weeks as the dollar drifted lower while equities roared after daily virus cases started declining," said Dilip Parmar, Research Analyst at HDFC Securities.

The local unit settled at 73.05, the highest closing level since March 26. On Monday, the rupee had closed at 73.22 against the US dollar. The domestic unit has appreciated 37 paise in the trading sessions to Tuesday.

Sriram Iyer, Senior Research Analyst at Reliance Securities, said the rupee appreciated on Tuesday against the dollar tracking the broad dollar weakness, upbeat risk appetite and strong local equities. “Moreover, the Reserve Bank of India's absence in the spot market also led to exit of dollar longs," he said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.40 per cent to 89.80. "The dollar slipped as poor economic data from the US led to expectation that interest rates may stay at ultra-low levels for quite some time and even government will continue with its fiscal stimulus," said Saif Mukadam, Research Analyst at Sharekhan by BNP Paribas.

The driving factor for the markets has been the steady drop in daily Covid cases. India's Covid-19 death toll climbed to 2,78,719 with a record 4,329 fresh fatalities on Tuesday, while the single-day rise in coronavirus cases stood at 2.63 lakh, the lowest in 28 days, according to the Union health ministry.