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Indian markets extended their recovery for the second consecutive day with Sensex and Nifty 50 gaining by at least 2% driven by broad-based buying across sectors on Tuesday. Heavyweight stocks supported the upside in the domestic equities. Also, steadiness in global markets lifted the performance. Due to the upbeat trend, investors got richer by more than ₹5.77 lakh crore on Dalal Street.
BSE Sensex closed at 52,532.07 up by 934.23 points or 1.81%. The benchmark had touched an intraday high of 52,799.40.
Heavyweight stocks Titan, SBI, TCS, Dr. Reddy's Lab, HCL Tech, Tata Steel, Wipro, Infosys, ITC, and L&T added to the upside by surging by 2-6%. The most valued stock, Reliance Industries also jumped by 1.6% further creating value gains.
Apart from large caps, buying was also witnessed in mid caps and small caps. BSE Midcap and SmallCap jumped 508.29 points and 699.49 points respectively.
All sectoral indices on D-Street recorded a bullish tone and surged by 1-6%. However, Consumer durables, IT, oil and gas, metal, banking, and capital goods stocks outperformed.
This led to investors' wealth rising by more than ₹5.77 lakh crore on BSE in a single day.
At the closing price, BSE equity market capitalisation stood nearly ₹240.64 lakh crore on Tuesday compared to the previous day's market cap of nearly ₹234.87 lakh crore.
Vinod Nair, Head of Research at Geojit Financial Services. "Absence of fresh selling triggers in the domestic and global economy along with falling commodity prices relieved the heavily discounted equity market to showcase recovery. The recovery indicates that the current uncertainties of inflation and monetary policy tightening have been factored in. However, with the highly sensitive nature of the current equity market, even the slightest inconvenience can trigger volatility"
Nifty 50 closed at 15,638.80 higher by 288.65 points or 1.88%. The benchmark had touched an intraday high of 15,707.25 before correcting. Bank Nifty climbed 1.55% and ended at 33,191.75.
Rupak De, Senior Technical Analyst at LKP Securities said, "Nifty moved up after a brief consolidation on the daily chart. On the higher end, it has reached near its previous swing low. The daily RSI is in positive divergence. Over the short term, the index may move higher towards 16000. The recovery may continue as long as it holds above 15500"
Meanwhile, the rupee dropped 12 paise to settle at 78.10 per dollar at the interbank forex market on the back of stubborn foreign fund outflows and a further spike in crude oil prices offsetting the support from the rally of domestic equities.
To date in June, FPI outflows have risen to the tune of ₹40,040 crore in the equity market already surpassing the previous month's selloff of ₹39,993 crore. So far this year, FPIs have pulled out more than ₹2.07 lakh crore from the equities.
On Monday, the Finance Ministry released its latest monthly economic report for May 2022, under which, it said, agencies worldwide have already projected a slowing of global economic growth, which is expected to witness headwinds with rising commodity prices, supply chain bottlenecks, and faster than the projected withdrawal of monetary accommodation. India’s economy is also expected to witness slowing growth, though still higher than the other emerging market economies.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services earlier today said, "The Finance ministry's latest Monthly Economic Review warns about the stress in government's finances caused by the rising food and fertiliser subsidies and revenue forgone from cuts in petrol and diesel taxes. Both fiscal and current account deficits are likely to deteriorate surpassing budget estimates. This macro headwind can turn out to be a headwind for markets too, particularly if crude remains at elevated levels. Investors should seek the safety of fundamentally strong large-caps during this phase of market turbulence."
