Investors focus on the upcoming ECB policy announcement
Investors flocked into IT, banking, and finance sectors amid a positive trend overseas, bringing market benchmarks back to life on Thursday after a three-session losing run. Traders said the momentum was boosted by a rising rupee and confidence around the rush of IPOs.
The 30-share BSE Sensex finished at 52,837.21, up 638.70 points or 1.22 per cent. Similarly, the NSE Nifty rose 191.95 points, or 1.23 per cent, to 15,824.05 points. With a gain of 5.65 per cent, Tech Mahindra led the Sensex pack, followed by Bajaj Finance, Bharti Airtel, Bajaj Finserv, Tata Steel, L&T, Infosys, and ICICI Bank.
HUL, on the other hand, was the worst performer, falling 2.27 per cent despite reporting a 10.7 per cent increase in consolidated net profit to Rs 2,100 crore for the June quarter. Asian Paints, Bajaj Auto, and M&M were among the other companies that suffered losses of up to 1.73 per cent.
Market breadth was in favour of bulls, with 26 of the Sensex 30 stocks closing in the green. According to Milind Muchhala, Executive Director, Julius Baer, Indian markets made a smart pull-back supported by the positive global set-up and a decent start to the Q1 FY 2022 earnings season.
"Markets are clearly rewarding the stocks/sectors where the earnings momentum is strong (such as IT - especially midcap IT, cement, metals) or where growth visibility remains good (such as chemicals, healthcare, etc.).
“Moreover, with the flurry of IPOs, which are seeing a very healthy response from investors, the related sectors are seeing interest due to benchmark valuations. Also, with the headline index remaining steady at elevated levels, the broader market (Midcaps/Small caps) continues to witness a lot of excitement/participation," he said.
Vinod Nair, Head of Research at Geojit Financial Services, said, "Taking cues from firm global markets, the domestic market witnessed robust momentum shrugging off concerns over the spread of Covid-19 and FII selling."
"Global markets continued to hold onto gains owing to solid earnings reports and turned its focus on the European Central Bank’s policy announcement. A confirmation by Fed to continue its supportive policy in the upcoming meet despite rising inflationary pressure will be a key factor in maintaining the direction of the rally," he added.
BSE metal, telecom, capital goods, industrials, power, and IT indices rose up to 3.02 per cent, while the FMCG gauge ended in the red. Broader BSE midcap and small cap indices rose up to 1.52 per cent.
Global equities shrugged off recent worries over the Delta variant of the coronavirus, with investors focussing on the upcoming ECB policy announcement.
Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul, and Tokyo ended with strong gains. Equities in Europe were also trading on a positive note in mid-session deals.
Meanwhile, international oil benchmark Brent crude advanced 1 per cent to 72.95 dollars per barrel. The rupee strengthened against the US currency for the second straight session on Thursday, closing 15 paise higher at 74.46.