Market rebounded sharply from the previous session’s losses on Tuesday, with benchmark indices ending over 1 per cent higher led by auto and finance stocks.

After trading marginally higher in the first half, market gained momentum in the second half with recovery in auto, banking and financial stocks. The Centre’s decision to fast tracks Emergency Approvals for foreign-produced Covid-19 vaccines positively impacted market sentiments. Besides, Skymet prediction of normal weather for the current year also boosted the sentiment.

The BSE Sensex closed near the day’s high of 48,627.43 at 48,544.06, up 660.68 points or 1.38 per cent. It hit an intraday low of 47,775.32 in the morning session.

The Nifty 50, also closed above the 14,500-mark at 14,504.80, up 194 points or 1.36 per cent. It hit an intraday high of 14,528.90 and an intraday low of 14,274.90.

Breadth turns positive

The breadth of the market remained positive as 1.936 stocks advanced on the BSE, as against 928 declined; 182 stocks remained unchanged. As many as 225 securities hit the upper circuit as compared with 204 that hit the lower circuit. The number of scrips that hit a 52-week high was 110 as against 34 that hit 52-week lows.

Binod Modi, Head Strategy at Reliance Securities said, “Domestic equities witnessed brisk rebound towards the second half of sessions after investors took comforts from announcement that government is fast tracking approvals for overseas Covid-19 vaccines to improve supply of jabs and speed-up vaccination process.”

Vaccine approvals offer comfort

Rising number of Covid-19 cases had impacted market sentiments. In a bid to tackle rising Covid-19 cases, the Centre has decided to give emergency use approval to the vaccines developed or being manufactured overseas and have already been given clearance for restricted use by the regulatory bodies like USFDA, EMA, UK MHRA, PMDA Japan besides those which are listed in WHO. 

Apart from this, Russian vaccine Sputnik V has also received approval from the Drugs Controller General of India for emergency use, making it the third vaccine to be approved in India. 

Moody’s on Tuesday a double-digit GDP growth for India is likely in 2021 given the low level of activity last year, focusing on vaccination as a key element in controlling the second wave of Covid-19.

Auto, financials lead the rally

The rally today was led by auto stocks that rebounded sharply ending the two-day losing run. Financial stocks also gained momentum in the second half, while IT and Pharma remained under pressure due to profit booking. 

Mahindra & Mahindra, Tata Motors, Bajaj Finserv, Bajaj Finance and Maruti were among the top gainers on the Nifty 50 while Dr Reddy, TCS, Tech Mahindra, Wipro and HCL Tech were the top laggards.

Vinod Nair, Head of Research at Geojit Financial Services said, "Market attempted to pull back from yesterday’s selloff but wasn’t that enthusiastic.  IT sector broke the trend due to profit booking as initial Q4 results were in line with expectations not providing enough leeway to a highly valued sector. Industrial production for February declined by 3.6 per cent primarily due to contraction in the manufacturing and mining sectors. India’s retail inflation for March also rose to 5.52 per cent, however, it did not harm the market sentiment as it was in line with the recent RBI policy forecast. How the lockdowns will affect the economy will determine the trend of the domestic market, in the short-term."

IT & Pharma under pressure

On the sectoral front, all indices except Nifty IT and Pharma ended in the green. Nifty IT was down 3.28 per cent at closing while Nifty Pharma was down 1.19 per cent.

Meanwhile Nifty Auto ended 4.28 per cent higher. The Nifty PSU Bank, which crashed over 9 per cent on Monday, also rebounded 4.49 per cent today. The Nifty Bank was up 3.18 per cent while Nifty Financial Services was up 3.39 per cent.

Broader indices 

All broader indices were in green. Nifty Midcap 50 was up 2.80 per cent while Nifty Smallcap 50 was up 1.15 per cent. The S&P BSE Midcap index was up 1.46 per cent while the S&P BSE Smallcap was up 1.21 per cent.

The volatility index softened by 11.02 per cent and was down to 20.46.

“Notably, volatility index softened by over 10 per cent today offering some comforts. A bargain trading was also seen in midcap and small cap stocks,” added Modi. 

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