Sensex closed above the psychological 50,000 mark just a day ahead of the close of 2020-21 financial year. A sharp fall in derivative outstandings in the Nifty and Bank Nifty index around the March month expiry led the market to rise, experts said.

Higher derivative outstanding positions, mostly on the long side, were putting pressure on the markets last week. On Tuesday. the Sensex rose 2.3 per cent or 1,128 points to close at 50,136. The broader Nifty index rose 2.33 per cent or 337 points to end at 14,845.

Nifty derivative outstanding has come down to just around 1.24 crore units from more than 1.5 crore last week before expiry. Each Nifty contract is of 75 units.

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Suez Canal reopens

Supply-side pressure on the global commodity markets eased as Suez Canal reopened after the container ship ‘Ever Green was refloated after being stuck in the key waterway for nearly a week. Global crude prices eased marginally on Tuesday. Gold prices also fell.

Stock exchanges had not put out the buy-sell data for foreign and domestic funds and traders till the time of going to press. The data are crucial for knowing market trends. Till March 26, foreign portfolio investors were net buyers of stocks worth ₹2,161 crore in the cash segment. In the derivative segment, FPIs were net purchasers of index futures worth ₹3,326 crore and stock futures worth ₹1,612 crore.

The selling pressure in the past few days has come from domestic proprietary traders, high net worth individuals and retail investors who had gone short in the derivatives market, experts said. Also, this weighed on the markets since the pace of FPI buying reduced significantly after February’s sharp rally. In India, domestic players sell in March to generate cash for year-end tax payments, they said.

A lot of sector-specific movement was seen on Tuesday with the IT, Pharma, Metals and FMCG pack seeing good buying interest along with the heavyweights like HDFC.

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