Bulls Stage Stunning Comeback, Sensex Soars 1,600 Pts

D-street bulls staged a stunning comeback on the last trading day of the month and reversed almost all losses that began last week. The market capitalisation of all listed companies on the BSE jumped Rs 5.73 lakh crore to Rs 280.35 lakh crore from Rs 274.56 lakh crore on Monday.

At close, the Sensex was up 1,564.45 points or 2.70 per cent to settle at 59,537.07 while its broader peer, the Nifty settled 446 points or 2.58 per cent up at 17,759.30.

Sectoral wise, almost sector saw an uptick in Tuesday’s rally with the Nifty Realty index emerging as the biggest gainer, rallying more than 3 per cent. Financials, Banks and Auto also saw a 2.7 per cent surge. IT and the FMCG index were up 2.5 per cent and 1.7 per cent respectively.

On the Nifty, Bajaj twins stood apart with Bajaj Finserv and Bajaj Finance gaining 5.44 per cent and 4.91 per cent respectively. Other top gainers on the index included IndusInd Bank (4.56 per cent), Tech Mahindra (3.92 per cent), and Tata Motors (3.02 per cent).

Investor sentiment was also aided by positive movement in global markets. S&P500 futures were trading marginally higher, suggesting a flat to a positive start for Wall Street later in the day. European markets also saw a rebound with Germany's DAX up 1.4 percent, France's CAC rising nearly 1 percent, and Britain's FTSE gaining 0.4 percent at the time of writing.

Asian markets also exhibited mixed sentiment earlier in the day. South Korea’s Kospi and Japan’s Nikkei 225 rose 0.99 per cent and 1.14 per cent, respectively. China’s Shanghai Composite index fell by 0.42 per cent. 

"Strong bounce back in local benchmark indices came on the back of recovery in Asian and European indices. Focus seemed to have shifted from hawkish Fed stance to expectations of a strong Q1 GDP numbers. Despite volatility and uncertain global macro environment, the rally shows that India would remain a good long-term bet," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

"We are of the view that the short-term market structure has changed from negative to positive due to a strong pullback from lower levels. But due to temporarily overbought conditions, we may see range-bound activity in the near future," Chouhan added.

Investors are expecting strong GDP numbers for the quarter ended June 30, 2022. Various research reports have estimated the first quarter growth to be in double digits. Barclays' forecast says India's economic growth accelerated to 16 per cent YoY in Q1FY23. 

While last week, SBI too had estimated the GDP to grow at 15.7 per cent.

Shipping Corp of India rose 5 per cent after a report said Indian government will likely fast-track disinvestment.

On the technical outlook, Chouhan said, "For traders 17550 or the 20-day SMA could be an important level to notice. Above the same, the index could accelerate to the level of 17800-17850. On the other hand, an uptrend below 17500 would be weak. If the Nifty crosses the 18000 level then, the index could surge to 18300-18350."

India's equity and money markets will be closed for a holiday on Wednesday.