Sensex rebounds 1,400 points from day's low, ends 243 pts higher; Nifty tops 9,950

MUMBAI: A striking rebound in European markets lifted India’s benchmark Sensex around 1,400 points from its intra-day low to end higher on Friday with index heavyweights Reliance Industries (RIL) and HDFC Bank spearheading the recovery rally.

However, analysts warned the optimism could be short-lived in light of the rising coronavirus infections.

“The European markets and Dow Jones recovered and that, in turn, lifted our market,” said Gaurav Dua, Head Capital Market Strategy & Investments, Sharekhan by BNP Paribas.

“After the sharp pullback that we have seen from March lows, the risk-reward is not favourable, and so we will continue to see this selling pressure at higher levels. Consequently, we believe the near-term outlook is negative,” added Dua.

India is now the fourth-worst impacted country from Covid-19 infections, surpassing the UK, and next only to Brazil, Russia and the US.

After having dropped as much as nearly 1,200 points in the day, Sensex staged a smart recovery to close 243 points higher. Peer Nifty closed 71 points higher to end at 9,973.

A total of 17 Sensex stocks shut shop in the green. RIL reversed early decline and closed 3.34 per cent higher, contributing the most to Sensex’s gains. Private lender HDFC Bank followed next and rose 0.91 per cent.


Automobile major Mahindra & Mahindra was the top gainer in the Sensex pack. The stock rose 7.22 per cent even as the company reported a net loss of Rs 3,255 crore, compared with a net profit of Rs 969 crore a year ago.

Despite the market recovery, the breadth was nuetral as gainers and losers were nearly equal in number on the BSE.

In the broader market, BSE mid and smallcap indices rose 0.96 per cent and 0.13 per cent, respectively.

BSE Auto was the top sectoral gainer as it zoomed 2.91 per cent while BSE Telecom followed next with a 2.29 per cent rise.

BSE Bankex, which was the biggest sectoral loser in early trade, recovered to close 0.29 per cent higher.

BSE IT was the biggest sectoral loser and dropped 1.49 per cent after Wall Street Journal reported US President Donald Trump is considering suspending a number of employment visas including the H-1B, the most sought-after among Indian IT professionals, in view of the massive unemployment in America due to the coronavirus pandemic. IT majors Infosys and bigger rival Tata Consultancy Services (TCS) dropped 1.63 per cent and 1.41 per cent, respectively.

Foreign portfolio investors (FPIs) bought equities worth $502 million over the past five trading sessions while domestic institutional investors (DII)s sold $301 million worth of equities in the same period.

MARKETS AT A GLANCE

• Sensex rises 0.72%, or 243 points to 33,781
• Nifty gains 0.72% or 71 points to close at 9,973
• 17 of 30 Sensex stocks close higher
• Top Sensex gainers: M&M 7.22%, Bajaj Finance 4.78%, Hero Moto 4%
• Top Sensex losers: ONGC 3.39%, TechM 2.91%, Power Grid 2.25%
• Market breadth neutral; gainers nearly equal losers on BSE
• BSE midcap up 0.96%, BSE smallcap 0.13%
• BSE Auto top sectoral gainer, up 2.91%; M&M, Hero MotoCorp lead
• BSE Telecom up 2.29%; Voda Idea up 8.09%, Infratel 6.76%
• BSE IT top sectoral loser on reports Trump may suspend H1B visas
• 3i Infotech, TVS Electronics, HCL Infosystems shed 5% each
• Hindalco gains 1.14% ahead of Q4 earnings

WHO MOVED MY MARKET

• Recovery in European, US markets

European stocks jumped with U.S. equity futures on Friday as a dramatic selloff spurred by concerns over a second wave of coronavirus infections and a slower-than-expected economic recovery eased, Bloomberg reported. Futures on the S&P 500 Index advanced 1.9 per cent as of 10:30 a.m. London time, while the Stoxx Europe 600 Index gained 1.2 per cent. On the other hand, the MSCI Asia Pacific Index dipped 1.2 per cent.

• Continued record surge in coronavirus cases

India recorded more than 10,000 new COVID-19 cases in a day for the first time, with 10,956 people testing positive for the deadly Covid-19, taking the total count to 2,97,535. The death count rose to 8,498 with a record single-day spike of 396 fatalities.

• Unfavourable risk-reward ratio

The uncertainty around demand outlook has weighed on corporate earnings, and many companies have refrained from providing a guidance, citing the uncharted terrain. This has weighed on the earnings outlook, and the recent run-up in stocks, may not be justified.

WHAT TO WATCH OUT FOR

• The continued sharp spike rise in new coronavirus cases is a major cause of worry after the country eased its strict lockdown measures this month.

• Global markets moves will be closely watched as the domestic market is expected to take cues from them.