On Tuesday, equity benchmarks reacted to lackluster global cues and posted smart gains. This was aided by strong buying interest from index heavyweights Reliance Industries as well as the HDFC twins.
Traders said that the gains were capped by a depreciating rupee, and unabated outflows of foreign funds.
BSE Sensex, 30-shares, rallied 562.75 point or 0.94 percent to settle at 60.655.72. NSE Nifty, a wider index, climbed 158.45 point or 0.89 percent to 18,053.30.
With a jump of 3.51 percent, Larsen & Toubro topped Sensex gainers charts, followed by Hindustan Unilever and HDFC, HCL Technologies and HDFC Bank.
Bajaj Finserv and IndusInd Bank, Tata Steel, Wipro and Bajaj Finance, however, were the leaders, losing up to 1.67 percent.
Market breadth was favorable to the bulls with 22 advances and 8 falls.
The domestic market is trying to gain in comparison to its weak performance YTD, which was due to soft Q3 results, and the Union Budget. The third quarter started on a low note. However, the latest financial announcements by IT and banks blue chips are encouraging.
“Heavyweights are also pushing for the counter… (following a fall in windfall taxes. The trend should continue given the positive undercurrents. Vinod Nair from Geojit Financial Services, Head of Research, said that a lot will be dependent on Q3’s second line, the Budget outcome and the Fed’s policy statement.”
The government has reduced the windfall profit tax levied on domestically-produced crude oil as well as on the export of diesel and ATF, in line with softening international oil prices, according to an official order.
Markets recovered from Monday’s drop and gained almost 1% amid volatility. The bulls are working hard to limit the damage in the current consolidation phase, and they await some trigger for further recovery.
“We believe that buying in selected index majors might provide some relief, but not enough to trigger a directional move. “We reiterate our belief that stock selection and risk management should be the main focus until we receive a decisive signal,” stated Ajit Mishra (VP – Technical Research at Religare Broking Ltd.
The wider market was marginally down in Tuesday’s trade. The BSE smallcap gauge fell 0.13 percent and the midcap index fell 0.06 percent.
Utilities jumped 1.48 percent, power rose 1.42 percent, FMCG (1.15%), realty (1.10%), energy (0.97%), teck (0.87%), oil & gas (0.85%), IT (0.79%), and financial services (0.27%).
The world markets fell after China reported a GDP increase of only 3 percent for 2022, the lowest growth rate in more than 40 years. This triggered new fears about a global recession.
Asia’s equity markets ended lower in Seoul, Shanghai, and Hong Kong, while Tokyo closed in the green.
Mid-session deals saw equity exchanges in Europe trade in negative territory. Martin Luther King Jr Day caused markets in the USA to be closed Monday.
Brent crude oil, an international benchmark for oil, rose 0.67 percent to USD 85.03/barrel.
The rupee fell 19 paise to close in at 81.77 (provisional), against the US dollar Tuesday. This was due to a rebound of the greenback overseas as well as firm crude oil prices.
