With this, the indexes have recovered part of the near 4% slump on Friday that was sparked by rising bond yields. However, they ended down from the 2% high hit during the session amid profit booking.
India's key stock indexes rose on Monday as data showed that the economy returned to growth in the December quarter. Bond yields easing from last week's peaks and the US legislature passing a $1.9 trillion coronavirus relief package also helped stocks log gains.
With this, the indexes have recovered part of the near 4% slump on Friday that was sparked by rising bond yields. However, they ended down from the 2% high hit during the session amid profit booking.
The Nifty gained 232.40 points or 1.6% to close at 14,761.55 and the Sensex rose 750 points or 1.5% to close at 49,849.84 after briefly reclaiming the 50,000-mark during the session.
Some traders faced anxious moments, causing them to vent their anger on social media.
Deflationary environment: Mobius Those using the platforms of brokers such as Zerodha and HDFC Securities were unable to execute transactions for a time, reviving bad memories of the extended stoppage on the NSE last week.
The Bank Nifty recouped some losses and ended up 1.4%. PowerGrid jumped 6% to end the day as the best performer on the Sensex while ONGC, UltraTech, Asian Paints, Kotak Mahindra Bank and Titan gained 3-5%.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 125.15 crore while domestic institutional investors sold equity worth Rs 195 crore on Monday. Market strategists feel fears of a taper tantrum at this stage are unfounded given that the US Federal Reserve has made no change in its easy monetary policy stance.
"Bond yields are moving up but they are still very, very low... Of course in the case of India bond yields are much higher," said Mark Mobius, founder of Mobius Capital Partners. "Any way you look at it, these are very low yields. We are in a deflationary environment."
Moreover, the positive GDP data has boosted expectations of faster post-Covid economic recovery.
"The resurgence of pandemic cases in some states is a potential near-term risk, but we believe that India is on the cusp of a business cycle recovery, which is likely to be aided by tailwinds from the lagged impact of easy financial conditions, frontloaded fiscal activism, strong global growth and the 'vaccine pivot' point," said Nomura.
The foreign brokerage said that GDP data should not alter the policy path of the RBI and both the repo rate and the accommodative policy stance are likely to remain unchanged at the Monetary Policy Committee's April policy meeting.
Technically, the index has formed a bullish pattern on charts and managed to hold on to gains even after coming off the day's highs. Analysts said a rise above 14,840 levels on NSE would be a bullish sign.
"Tuesday may be an important day for the market as the dismissal of 14,830 would be extremely positive for the market and the dismissal of 14,600 would be negative," said Shrikant Chouhan, executive VP, equity technical research, Kotak Securities.
Get Unlimited Access to The Economic Times
