1 min read.Updated: 08 Dec 2021, 04:09 PM ISTLivemint
Sensex surged by nearly 2000 points in just two days
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Investors' wealth surged by ₹7.5 lakh crore in two days as Sensex extended rebound today. The benchmark index rose over 1,000 points today, taking its two-day gain to about 2000 points. A risk-on rally in global markets and Reserve Bank's decision to leave key interest rate unchanged supported Indian markets. Nifty rose 1.7% to finish above 17,450.
With reports that the new COVID variant Omicron is unlikely to be more severe than the Delta variant, an overall positive sentiment persisted in the global markets.
"Positive global cues coupled with the continuation of an accommodative policy stance of the RBI by holding rates fired up the bulls today even as the central bank decided to enhance the variable reverse repo rate auctions to rebalance liquidity. The bullish undertone was reflected in the sectoral indices as well as in advance-declines as the market breadth was healthy with small and midcaps too participating in the rally. Several smaller companies today have access to capital and this is getting reflected in the markets as well," said S Ranganathan, Head of Research at LKP securities.
Bajaj Finance was the top gainer in the Sensex pack, rising around 4 per cent, followed by Maruti, SBI, Bajaj Finserv, Sun Pharma and Asian Paints. On the other hand, Kotak Bank and PowerGrid were the laggards.
The Reserve Bank of India (RBI) today maintained status quo on the interest rate and decided to continue with its accommodative stance.
RBI retained its growth projection at 9.5 per cent for the current fiscal despite concerns over Omicron.
"Fears over Omicron faded as recent reports suggested that the new virus isn’t deadly as earlier anticipated and this helped the market to add-on to recent strong gains. RBI's GDP forecast for FY22 remained high at 9.5% showing confidence over economic recovery and inflation forecast is below the market estimates," said Vinod Nair, Head of Research at Geojit Financial Services.
“As RBI policy is behind us, the focus will shift back to global cues and upcoming macro data (IIP & CPI). Further, as the number of IPOs is lined up, primary markets will keep investors busy. Given the high volatility in the market, we would remain cautiously optimistic on the markets," said Ajit Mishra, VP - Research, Religare Broking Ltd.