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The benchmark indices extended gains through the day, closing in the green on Wednesday, with pharma and financials leading the rally.
The market, which opened on a positive note gained further in the second half as it welcomed the recent measures announced by RBI Governor Shaktikanta Das to provide liquidity support, which is likely to provide some relief to investors.
The BSE Sensex closed at 48,677.55, up 424.04 points or 0.88 per cent. It hit an intra-day high of 48,742.72 and a low of 48,254.32. The Nifty 50 closed near the day’s high of 14,637.90 at 14,617.85, up 121.35 points or 0.84 per cent. It hit an intra-day low of 14,506.60.
The breadth of the market was positive with 1,834 stocks advancing, 1,110 declining and 168 remaining unchanged on the BSE. As many as 332 securities hit the upper circuit and 184 hit the lower circuit, while 209 hit their 52-week high while 37 touched 52-week low.
Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities rebounded mainly supported by financials, IT and pharma. Notably, announcement of liquidity supports by the RBI’s Governor to tackle the challenges coming from second wave of COVID-19 crisis aided financials to rebound. “
Sun Pharma, UPL, Kotak Bank, IndusInd Bank and Axis Bank were among the top gainers on the Nifty 50 while Adani Ports, Bajaj Finance, SBI Life, Asian Paints and Hindustan Unilever were among the top laggards.
Market welcomes RBI measures
The Reserve Bank of India on Wednesday announced a host of measures, including a special ₹50,000 crore term liquidity facility for banks for on-lending to entities such as vaccine manufacturers involved in the fight against Covid-19, a special ₹10,000-crore long-term repo operation to support small finance banks to on-lend to MSEs, and a resolution framework 2.0 for individuals, small businesses and MSMEs. This has positively impacted the market, providing some relief to investors.
“Liquidity support measures announced by the RBI augur well for lenders and economy. We further believe that the announcement of a second tranche of Rs 35,000-crore purchase of the government’s bond under G-SAP 1.0 on May 20 may result in a further softening of bond yields, which also bodes well in terms of lower cost of funds,” said Modi.
Vinod Nair, head of Research at Geojit Financial Services said, "The domestic market edged up, boosted by pharma and financial stocks, following the RBI Governor’s announcement and positive global markets. India’s Service PMI index reported a marginal decline in April to 54.0 from 54.6 in March 2021 owing to a slowdown in external demand and escalation of the pandemic, but is expected to improve on a QoQ basis from Q2FY21 onwards."
Sectoral and broader indices
On the sectoral front, all indices, except Nifty Realty were in the green. Nifty Realty was down 1 per cent at closing.
The rally today was majorly led by pharma and financials. Nifty Pharma was up 4.12 per cent while the Nifty Bank was up 1.59 per cent. Nifty Financial Services was up 1.01 per cent. IT stocks also recorded significant gains with Nifty IT closing 1.17 per cent higher.
All broader indices were in the green.
Nifty Midcap 50 was up 0.89 per cent while Nifty Smallcap 50 was up 0.22 per cent. The S&P BSE Midcap was up 1.05 per cent while the S&P BSE Smallcap was up 0.77 per cent.
The volatility index softened 4.55 per cent.
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