Sensex, Nifty race to over 1-week high amid global stock rally
Key stock indices Sensex and Nifty rallied for the second day in a row on Tuesday to close at more than one-week high levels as energy, IT, pharma and banking stocks advanced amid gains in global stocks. The 30-share BSE Sensex surged by 477.24 points or 0.83 per cent to close at more than one-week high of 57,897.48. As many as 28 of its constituents closed with gains while two declined.
The broad-based Nifty of the National Stock Exchange rose by 147.20 points or 0.86 per cent to settle 17,233.45, tracking gains in Sun Pharma, Asian Paints, and Reliance Industries. All Nifty stocks except for two closed in the green.
"The domestic market is drawing strength from the upsurge in global equity indices, which have been steadily moving up in recent sessions after correcting sharply on concerns related to the Omicron variant, likely interest rate hikes in key developed economies going ahead, and the rising inflation world wide," Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said.
The resilience of the US market -- S&P 500 registered its 69th record high on Monday -- and a spike in crude oil are indications that the Omicron variant, though surging, is unlikely to impact economic activity in any meaningful way, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said. Asian Paints was the top gainer in the Sensex pack, rising nearly 3 per cent.
Sun Pharma rose by 2.59 per cent after the company, along with other pharma players, received a regulatory nod for the Covid-19 drug Molnupiravir.
Union Health Minister Mansukh Mandaviya on Tuesday said that the Central Drug Authority has approved two COVID vaccines Covovax and Corbevax, and anti-Covid pill Molnupiravir for restricted use in an emergency situation.
Among major index movers, Reliance Industries rose by 1.18 per cent as crude oil prices recovered. Infosys rose by over 1 per cent while HDFC Bank advanced 0.74 per cent. M&M, NTPC, UltraTech Cement, Titan, L&T and Tech Mahindra were among lead gainers. On the other hand, IndusInd Bank and PowerGrid were the only laggards among Sensex scrips.
All sectoral indices ended on a positive note, with BSE capital goods, basic materials, industrials, auto and consumer durables indices rising up to 1.56 per cent.
Broader midcap and smallcap indices surged up to 1.43 per cent.
S Ranganathan, Head of Research at LKP securities said, "Indices remained positive and closed in the green today with most of the sectoral indices ending higher. The Advance-Decline ratio was very favourable as investors sought to accumulate high-quality Midcap names across sectors."
Ajit Mishra, VP - Research, Religare Broking, stated that markets are taking cues from their global counterparts and seeing a rebound amid the news of rising COVID cases domestically and restrictions announced by a few states. While all the sectors are contributing to the move, the underperformance of the banking pack is still hurting the sentiment.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo ended on a positive note. Stock exchanges in Europe were also largely trading with gains in mid-session deals.
Meanwhile, international oil benchmark Brent crude rose 0.61 per cent to USD 78.70 per barrel.
