Benchmarks Sensex and Nifty closed higher on Wednesday on back of positive overseas markets, buying sentiment in banking and financials and better than estimated earnings.
Reversing two days of straight losses, Sensex closed 995 points higher at 31,605 and Nifty ended 285 points higher at 9,314.
Vinod Nair, Head of Research at Geojit Financial Services said,"Benchmark indices staged an intraday rally in sync with global cues, as some pockets of value buying emerged. Inspite of rising number of infections, markets expect slow return to normalcy, when lockdown 4.0 ends this week. All sectoral indices were in the green and Institutional buying in banking stocks helped the bank index gain by over 7%. The volatility is expected to continue, ahead of tomorrow's F&O expiry. "
ITC, Reliance Industries, M&M, Ultratech Cement, Asian Paints, Titan and NTPC were among the top losers today. HCL Tech, HDFC Bank, Maruti, IndusInd Bank, Bajaj Finance, Birla Corporation, MMTC and Meghmani Organics were among the top gainers.
Sectorally, except for media and pharma, all other indices ended in green territory, with heavy buying registered in banking and financial stocks that closed 7% and 5% higher, respectively.
Earlier indices turned volatile amid weakness in SGX Nifty and lost morning gains. However, bourses climbed in the last hour of session on Wednesday, amid buoyancy in overseas markets and heavy buying in banking and financials.
As per experts, Sensex and Nifty followed a rally in local equity indices by the later afternoon and closed over 3% higher each. Worldwide, equities gained strength as businesses restarted post easing of lockdown restrictions and banks promised more stimulus.
Asian markets turned positive by the afternoon session as investors gave more weight to reopening of economies than to tensions between the US and China. While SGX Nifty closed 3.14 % higher, only Shanghai and Hang Seng were trading flat with negative bias.
US markets closed positively on the back of removal of lockdown restrictions, with investors awaiting a response from Trump regarding sanctions on China.
European markets led higher today amid rising optimism about reopening of economies and potential corona vaccine.
Ajit Mishra, VP - Research, Religare Broking said," Though we're seeing reopening of the economy in phases, it would be tough to translate into business amid rising COVID-19 cases and migrants issues. Having said that, we're anticipating this rebound due to extreme oversold positions in the banking and financial space and Nifty would now face hurdle around 9,350-9,450 levels."
The growth rate of new infections has shown no signs of slowing down despite an extended strict lockdown across the nation which has dampened economic growth outlook and kept trades cautious, suggested experts.
On the currency front, rupee ended at 75.62 per dollar compared to its earlier close of 75.66 per dollar, amid strengthened American currency and high volatility in the domestic equity market.
Meanwhile, Heritage Foods, India Grid Trust, Foseco, Aditya Birla Fashion and Retail, Vaibhav Global, United Spirits, Tata Investments, Quess, Ujjivan Financial Services among others will report their March quarter earnings later in the day.