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Home >Markets >Stock Markets >Stocks soar 2% on global rally amid growing optimism

Stocks soar 2% on global rally amid growing optimism

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Whatever the outcome of the general election, stock markets in India would move on to the more pressing macroeconomic issues. Abhijit Bhatlekar/Mint

  • The BSE Sensex gained 1147.76 points or 2.28% to end at 51,444.65.
  • The Nifty also surged 326.50 points or 2.19%, closing at 15,245.60 on the back of widespread optimism led by continuing covid-19 vaccination process throughout the country.

MUMBAI : Markets surged over 2% on Wednesday, extending gains for the third straight day as investors took comfort in retreating bond yields in the US and the expanding covid-19 vaccination drive in India.

Markets surged over 2% on Wednesday, extending gains for the third straight day as investors took comfort in retreating bond yields in the US and the expanding covid-19 vaccination drive in India.

The BSE Sensex gained 1,147.76 points or 2.28% to end at 51,444.65, while the Nifty surged 326.50 points or 2.19% to close at 15,245.60.

The BSE Sensex gained 1,147.76 points or 2.28% to end at 51,444.65, while the Nifty surged 326.50 points or 2.19% to close at 15,245.60.

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In other regions of Asia, too, markets ended higher, with Hong Kong’s Hang Seng index, China’s Shanghai Composite, Japan’s Nikkei 225 and South Korea’s Kospi climbing 0.5-3%.

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“Markets across the globe were filled with optimism as the focus shifted from concerns over high valuations to a stronger economic recovery and earnings growth. The Indian market was on a rising streak, echoing the global sentiment. The Nifty bank (index), which had a rough week so far, took a breather and led the rally while consolidation was seen in auto stocks," Vinod Nair, head of research, Geojit Financial Services, said.

Nervousness is ebbing in India as well: the India volatility index (VIX) fell 6.41% to close at 22.09 on Wednesday.

According to Ajit Mishra, vice-president-research, Religare Broking Ltd, market participants are taking comfort from domestic factors such as decent macro data, earnings upgrades and the steady progress of the vaccination drive.

“Importantly, the Nifty has reversed last week’s decline, and indications are pointing toward a further surge ahead. We remain cautiously optimistic on the markets and suggest focusing more on the selection of trades," Mishra said.

Investor wealth rose by 9.41 trillion in three days of steadily rising markets, with the market capitalization (m-cap) of BSE-listed companies reaching 210.22 trillion.

In the past three sessions, the benchmark Sensex index has rallied 4.78%, while the Nifty has gained 4.93%. The BSE Mid Cap index and the BSE Small Cap gained 298.62 and 279.05 points, respectively, to a record closing of 20,883.90 and 21,085.29.

The government has said that there are enough covid-19 vaccines for the country even though it has sent quantities overseas, a Reuters report said.

India, which makes 60% of all vaccines in the world, plans to immunize 300 million people—one-fifth of its population—against the virus by August.

According to Kenneth Andrade, founder and chief investment officer, Old Bridge Capital Management, the next growth cycle in India could come from manufacturing, utilities, agriculture and digitization.

“Valuations and business models in this space have been overlooked as historically these have been non-performers. Companies’ profitability in agri-segments have now become structural as cash flows in the rural economy will remain elevated," he said in a media roundtable on Wednesday.

Foreign institutional investors have been net buyers of $34.94 billion in equity and net sellers of $6.29 billion in the debt markets since the beginning of the fiscal year, while domestic institutional investors sold 1.40 trillion in stocks, according to data on the exchanges.

The rupee on Wednesday surged by 65 paise—its biggest single-day spike since September 2020—to end at 72.72 against the dollar on the back of weakness in the American dollar and a rise in risk appetite in the global markets

PTI contributed to the story.

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