Strong Q1 results, stimulus hopes drive Sensex 225 points higher; VIX falls for 6th day

NEW DELHI: Supported by better-than-expected quarterly earnings, hopes of a US stimulus package and signs of de-escalation in tensions between the world's two biggest economies, domestic equity indices edged higher on Tuesday even as the Covid-19 cases continued to rise unabated.

India Inc has surprised the Street with their earnings performance for the pandemic hit quarter, led especially by the pharma sector. Apart from that, traders are also taking comfort from the fact that the volatility index has come down for the sixth day in a row.

India Volatility Index or VIX tanked 5.57 per cent to 21.25 at the end of the day.

"Indian markets continued their run on the basis of earnings results and stock specific news, amidst hopes of another round of stimulus measures by the government. This expectation should ensure liquidity in the markets in the near term," said Vinod Nair, Head of Research at Geojit Financial Services.

Russia government’s approval to a locally made Covid-19 vaccine also boosted sentiments, said analysts.

Buying in banks, financials and some consumer stocks lifted the 30-share pack Sensex to the fourth straight day of gains, up 225 points at 38,407. Its NSE peer Nifty rose for the sixth day, adding 52 points to 11,322.


Among bluechips, Axis Bank was the top gainer, up 3.96 per cent at Rs 448. The stock rose after the private sector lender said it has raised Rs 10,000 crore through allotment of equity shares to qualified institutional buyers (QIB).

IndusInd Bank, ITC, HDFC Bank, Tata Steel, HDFC and ICICI Bank were among other major gainers, rising 1-3 per cent. Titan, Bharti Airtel and HCL Tech were the top three losers.


Broader markets indices were mixed with Nifty Midcap snapping its five day rally, falling 0.34 per cent while Nifty Smallcap continued on its upward journey, jumping for the eighth day. The index gained 0.37 per cent.

Emami, Indian Bank, IDFC First Bank, Jindal Steel, Eros Media, GMM Pflauder, Vaibhav Global and Nila Infra were top gainers in the broader market space, rising in the range of 5-16 per cent. Meanwhile, Alkem Labs, Torrent Pharma, Info Edge, Sandur Manganese and Transpek Industry were among the biggest drags.

Among sectors, Nifty Pharma that saw a steep jump in the previous session, witnessed profit booking and was the biggest sectoral loser. Nifty IT and Nifty Realty joined it with a drop of half a per cent each. On the other hand, Nifty Metal cruised to the eight day of gains, followed by Nifty Media and Nifty Bank.

Overall, 1,600 stocks closed the day in the green while 1,161 stocks ended with cuts. Over 200 stocks hit their 52-week highs, mostly from chemical and pharma space. Over 400 stocks hit the upper circuit limit during the trade.

Auto parts makers were in focus during the day. Minda Industries fell 0.51 per cent after setting its rights issue price while Motherson Sumi advanced 2.43 per cent despite reporting a loss of Rs 1,192 crore for the June quarter.

FIIs have poured in Rs 10,420 crore in the domestic equity market so far in the month of August.


World stocks inched to 5-1/2 month highs, lifted by bets a US fiscal stimulus package will be reached and by signs Sino-US tensions have eased ahead of a crucial round of trade talks. However, investors are watchful.

Economic data worldwide also remains a cause for concern, the latest being a steep drop in exports from trade bellwether South Korea and Britain seeing its biggest job losses since 2009.

Let’s prepare for tomorrow

• Q1 earnings: Aarti Industries, Ashok Leyland, Aurobindo Pharma, Bharat Forge and Tata Power are some of the companies that will come out with their earnings on Wednesday.

• The government will release CPI inflation data on Wednesday, which will be tracked by market participants.

• Deppak Jasani of HDFC Securities believes global cues suggest that some more upmove could be in offing in coming days.