Markets stage a sharp rebound after heavy sell-off in first half of the day

Our Bureau. Mumbai | Updated on June 21, 2021

Sensex up 835 points from the day's low

The market rebounded sharply from morning sell-off during closing hours to end in the green on Monday. After opening in the deep red, the market recovered in the second half, led by a sharp rally in metals and financials.

The BSE Sensex closed at 52,574.46, up 230.01 points or 0.44 per cent. It recovered over 835 points from the day's low of 51,740.19. The index climbed to a high of 52,629.18. The Nifty 50 closed at 15,746.50, up 63.15 points or 0.4 per cent, recovering from a low of 15,505.65. It hit an intraday high of 15,765.15.

Breadth turns positive

The breadth of the market turned positive, with 2,049 stocks advancing, 1,258 declining and 156 remaining unchanged on the BSE. As many as 573 securities hit the upper circuit and 261 the lower circuit; 398 hit their 52-week high while 37 touched a 52-week low.

Binod Modi, Head Strategy at Reliance Securities, said, "Domestic equities witnessed swift recovery after seeing steep gap-down opening today and shrugged-off weak global cues once again. Notably, a strong rebound in PSU banks was a prime factor for the market's recovery. Further, Reliance Industries also recorded some gains ahead of its AGM and arrested market's fall."

Adani Ports, NTPC, Titan, State Bank of India and Bajaj Finserv were the top gainers on the Nifty 50, while UPL, Wipro, Tata Motors, Maruti and Tech Mahindra were the top laggards.

Vinod Nair, Head of Research at Geojit Financial Services, said, "The domestic market opened on a weak note due to the hawkish monetary policy of the US Federal Reserve. But the market clawed back above day's low and closed in the green as the market expects a faster economic recovery owing to the PM's announcement on free inoculation for all citizens."

Adani stocks recover

The stocks of Adani Group Ltd also made a sharp recovery after remaining under pressure over the past week, following media reports suggesting that the National Securities Depository Ltd (NSDL) has frozen accounts of three foreign funds owning a stake in four of Adani group companies.

Adani Ports and Special Economic Zone, the top gainer on the Nifty 50 closed 5.13 per cent higher.

Adani Enterprises Ltd gained 2.92 per cent at closing. Adani Green Energy Ltd, Adani Transmission Ltd and Adani Total Gas Ltd were locked in the 5 per cent upper circuit. Adani Power Ltd ended 4.96 per cent higher.

"Adani Group stocks witnessed sharp recovery today after steep correction in last week following media reports suggesting NSDL freezing three FPIs accounts invested in Adani Group stocks," said Modi.

PSU Bank, realty and metals in focus

A sharp recovery in metals and financials and significant gains in PSU Bank stocks helped market recovery today. Meanwhile, Auto and IT slipped into the red in the second half. All indices except Nifty Auto and Nifty IT closed in the green.

Nifty Bank was up 0.91 per cent at closing, while Nifty Financial Services closed 0.70 per cent higher. Nifty PSU Bank recorded the highest gains and was up 4.11 per cent.

"PSU Bank was the top sectoral performer on reports of the government finalising Central Bank of India and Indian Overseas Bank for privatisation," said Nair.

Nifty Metal was up 1.12 per cent.

Realty stocks also managed to extend gains, with Nifty Realty up 2.33 per cent at closing.

Meanwhile, Nifty Auto was down 0.41 per cent, and Nifty IT was down 0.28 per cent.

Broader indices

Broader indices outperformed the benchmarks. All broader indices closed in green.

Nifty Midcap 50 was up 0.85 per cent, while Nifty Smallcap 50 was up 0.53 per cent. The S&P BSE Midcap was up 0.82 per cent, while the S&P BSE Smallcap was up 0.83 per cent.

The volatility index rose 1.77 per cent to 15.06.

"Notably, investors once again seemed to be lapping up quality mid-cap and small-cap stocks after recent steep correction. Volatility index hardened by over 3 per cent and hovering over 15 levels, which still looks to be reasonable," said Modi.

Published on June 21, 2021

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