Sensex rallies 835 points as banks, IT lead charge

After six straight sessions of losses, the equity markets on Friday bounced back in style with impressive gains amid a recovery in the US markets. While the Nifty reclaimed the psychological 11,000 mark, the Sensex closed above 37,000 mark.

The Nifty gained 244.7 points (2.26%) to close at 11,050.25 while the Sensex gained 835.06 (2.28%) to close at 37,388.6.

The benchmarks, however, ended the week in the red, declining by close to 4%. The markets after Friday’s rally added Rs 3.4 lakh crore in market capitalisation after losing nearly Rs 4 lakh crore in the previous session.

Market experts think the correction in the markets could have stopped for now.

Ambareesh Baliga, an independent market expert, said, “If the markets would have fallen below 10,800, then smaller retail investors would have panicked.
“Right now, till we reach 11,200, the market is in no man’s land, which means we don’t know where the market will go.

“The correction in the markets has stopped for now because we have been seeing ample liquidity in the market and it chases optimism.

“However, there could be some triggers going forward such as the earnings season and the US presidential elections which could put a spanner on the markets.”

The movement in the Indian market was largely impacted by the directions coming from the Wall Street and other global markets.

After the overnight rally on the Wall Street where technology stocks shone, the markets in India mirrored the gains.

The Nasdaq gained 0.37% on Thursday while the Dow Jones was up 0.2%. This came despite the weaker-than-expected jobs data on the hopes that there could be yet another fiscal stimulus round the corner.

Analysts at Credit Suisse believe that the pace of recovery in the US markets is not unusual.

In a note, Credit Suisse said, “The pace of the market’s recovery is not at all unusual. What makes this cycle different is the leadership of high quality growth stocks. We believe the market’s advance and the leadership experienced throughout the recovery is likely to persist.”

Back in India, foreign portfolio investors so far this month have withdrawn $225.3 million.

The outflow can be attributed to heavy selling by FPIs in the last four trading sessions where they pulled out $1 billion from the Indian equities.

The futures and options segment saw a turnover worth Rs 12.85 lakh crore and the cash segment saw a turnover worth Rs 55,295.95 crore.

This is against the six-month averages of Rs 15.53 lakh crore and Rs 53,128 crore, respectively.

Markets in China, Hong Kong and Taiwan were down between 0.12% and 0.26%. The UK, France, and Germany markets were declined by 0.51% to 1.71%.

The stock markets globally continued to face the heat of the rising Covid-19 cases.

Indian benchmarks on Friday outperformed its neighbouring indices.

Big gainers on Nifty were Bajaj Finserv, HCL Technologies, Cipla, Bharti Airtel, and IndusInd Bank, up by 6.6%, 5.3%, 5.12%, 4.94% and 4.4%, respectively. Major losers were SBI Life, BPCL and UPL, down by 1.1%, 0.86%, and 0.58%, respectively.