Sensex surges 750 pts as investors cheer Q3 GDP data

@the_news_21

Benchmark BSE Sensex surged nearly 750 points and NSE Nifty rallied over 232 points on Monday as investors cheered the domestic economy returning to positive territory after two quarters of contraction.

The 30-share BSE index briefly traded above the 50,000-mark in day trade before closing at 49,849.84, showing a rise of 749.85 points or 1.53 per cent. Of the Sensex constituents, 29 closed with gains.

Likewise, the NSE barometer Nifty settled with a gain of 232.40 points or 1.60 per cent at 14,761.55.

Top performers were PowerGrid, ONGC, Ultratech Cement, Asian Paint, Kotak Bank and Titan rising as much as 5.94 per cent.

“Positive global cues and US yields retreating from highs led to a strong opening today with Indices sustaining gains throughout the day. The broader markets saw energetic buying momentum across PSU basket and sectors like Paints & Speciality Chemicals,” S Ranganathan, Head of Research at LKP Securities said.

After two consecutive quarters of contraction, the Indian economy has finally entered an expansionary path.

The Gross Domestic Product (GDP) grew 0.4 per cent in the October-December 2020 period compared with the same period a year back, data released by the National Statistics Office on Friday showed.

High-frequency indicators were pointing towards the fact that the domestic economy is slowly entering the recovery path.

Vinod Nair, Head of Research at Geojit Financial Services said, “Domestic markets kick-started the month on a strong footing with increased optimism led by GDP reaching positive numbers, improving auto numbers and steady PMI manufacturing data.”

The auto sector was in focus as sales numbers for February were in favour of manufacturers.

All of the 19 sectoral indices except telecom ended in the green.

Auto, private banks and metals indices witnessed sharp rally ranging from 1.5 per cent to 2.5 per cent. Notably, volatility index softened by over 8 per cent, which offers comfort, Binod Modi, Head – Strategy at Reliance Securities.

Telecom stocks dropped as spectrum auction began with 2,251.25 megahertz (MHz) radiowaves valued at Rs 3.92 lakh crore up for bidding. Bharti Airtel dropped by 4.45 per cent.

Smallcap and largecap indices outperformed the benchmark – rising 1.61 per cent and 1.56 per cent, respectively.

While midcap index underperformed the Sensex, gaining 1.46 per cent.

Elsewhere in Asia, bourses closed significantly higher amid some stability in bond markets after last week’s turmoil. Further, progress in the US stimulus package also lent some support to investor sentiments globally.

Global markets were on an upward rally owing to the much-anticipated US stimulus package being approved and reports regarding the progress in the vaccines.

Meanwhile, the global oil benchmark Brent crude was trading 0.88 per cent lower at USD 65.39 per barrel.

On the forex market front, the rupee dropped 8 paise to end at 73.55 against the US dollar.

Modi said domestic equities witnessed sharp rebound mainly on favourable global cues and positive GDP data.

On Friday, the BSE Sensex had crashed 1,939.32 points or 3.80 per cent its worst one-day fall since May 4 last year. Similarly, the broader NSE Nifty had plunged 568.20 points or 3.76 per cent its biggest single-day drop since March 23 last year.

Foreign investors had sold equities worth Rs 8,295.17 crore on a net basis on Friday, as per exchange data.