Equity indices erased early gains but managed to close in the green territory on Tuesday, amid heavy selling pressure in banking stocks and weakness in European indices.
Reversing losses after three consecutive sessions, Sensex closed 167 points higher at 30,196 and Nifty rose 55 points to 8,879.
European markets fell in trade today as investors turned cautious over bleak economic data and feared of the second wave of infections amid re-opening of many countries from lockdown.
Meanwhile, early results for an experimental vaccine kept global sentiments buoyed, sparking speculation that economies could snap back quickly.
Earlier, the market opened higher and rose sharply in afternoon session backed by the global rally. By the first hour of trade, Sensex gained 650 points to 30,668 and Nifty climbed 122 points to 9,008.
Expressing views on the volatile market trend today, Ajit Mishra, VP - Research, Religare Broking said," Markets settled with a gain of over half a per cent amid volatility, after the sharp plunge in the previous session. Markets were dealing with the stress of rapid rise in COVID-19 cases and extension of lockdown and the disappointment from the economic package which worsened the situation. The fear of further deterioration in asset quality of banks and NBFCs has triggered a sharp fall in banking and financials of late, and we do not see this easing out anytime soon. Global positives have also failed to cheer the participants in recent instances."
Asian stocks rose Tuesday, spurred by a surge on Wall Street, as markets banked on hopes of the experimental vaccine for the deadly coronavirus disease.
Besides this, re-opening of many economies, ease in lockdown restrictions and rise in oil prices also helped Asian and US markets trade in an upward trajectory.
In the domestic market, heavy-sell off was registered in banking pack. Sectorally, gains in auto, financials, FMCG, IT, media and metal sectors were capped by losses in pharma, banking and realty indices.
Vinod Nair, Head of Research at Geojit Financial Services said, "Although the trial of the vaccine seemed to give positive results, the development of this is still in the very initial stage and is some time away from approvals and production. Meanwhile, in India, confirmed infections crossed the One lakh mark, with no signs of slowing down. Additionally, with the stimulus measures seen to be inadequate to boost demand in the short term, investors need to be cautious in this market, as the uncertainties still persist."
On the currency front, Indian rupee, the local unit ended near the day's high level at 75.64 as against the previous close of 75.90 per dollar.
Meanwhile, investors also took cues from the latest and upcoming March quarter earnings. Apollo Tyres, Tata Power, Sanofi, Larsen & Toubro Infotech, Bajaj Finance, Embassy Office Parks REIT, JMC Projects, NESCO, MPS among others will report earnings today.