Bulls Return To D-street; Sensex Soars 1345 Pts
In what was the best day for Sensex in three months, Indian equity benchmark indices surged for the second consecutive day on Tuesday. Bulls returned to D-street even as LIC's debut on the bourses was tepid as it got listed at a discount of 9 per cent over its issue price of Rs 949. Also, the Indian rupee weakened to an all-time low of 77.69 against the dollar in morning. On the inflation front, the government on Tuesday released the WPI inflation data for the month of April which surged to 15.08 per cent, a three decade high.
Investors also tracked recovery in global markets as well as the news of no new Covid cases in Shanghai, China. The hopes that refunds of LIC IPO would soon find way into markets also lifted investor sentiment on Tuesday.
"Bulls roared back on Dalal Street as Nifty ended above 16250. Metal pack were the star performers shine as key benchmark indices rose sharply amid positive Asian and European stock market cues in the backdrop of outweighed inflation and stagflation fears. Value buying backed by short covering came to bulls’ rescue. The biggest positive catalyst was China -- the biggest consumer of industrial products -- eased Covid-19 related restrictions. The optimism was so powerful that bulls shrugged off LIC’s poor listing performance," said Prashanth Tapse, Vice President (Research), Mehta Equities.
The 30-share Sensex rallied 1344.63 points or 2.54 per cent to settle at 54,318.47. Its broader peer Nifty50 surged 417 points to settle at 16,259.30 points. The rally was led by surge in metal stocks and market heavyweights Reliance, ITC, and ICICI Bank, among others.
On the Sensex, all stocks settled in green. Tata Steel was the top gainer as it surged 7.62 per cent. Other top gainers on the Sensex include Reliance Industries (4.26 per cent), ITC (4.15 per cent), ICICI Bank (3.97 per cent), WIPRO (3.97 per cent) and Larsen & Toubro (3.80 per cent).
On the Nifty50, Hindalco Industries, Coal India, JSW Steel, ONGC, Tata Motors and Adani Ports & Special Economic Zone were among top gainers. Tata Consumer Products was the lone loser on Nifty50.
Investors became richer by over Rs 12 lakh crore after today's market rally.
However, Kotak Securities is of the view that the rally could be short lived. "The rally could be short lived as the unabated FII selling coupled with concerns of further rate hikes to tame inflation may fuel volatility," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
"On daily charts, Nifty has formed a long bullish candle which is broadly positive in the short term. For the trend following traders, 16150 would be the trend deciding level, above which the positive momentum is likely to continue till 16380-16450. On the flip side, a quick intra-day correction is possible if the index slips below 16150. Below the same, the index could retest the level of 16080-16050," added Chouhan.
On Wednesday, investors will keep track of Bharti Airtel as the telecom giant registered a 164 per cent jump in its net profit y-o-y for the quarter ending in March. On Tuesday, Airtel's stock closed 1.79 per cent higher at Rs 705.60 apiece on NSE.
