Benchmark indices rose for the third straight session today backed by strong buying in financial and metal stocks. Sensex surged 1,147 points to breach the 51,000-level and Nifty reclaimed the 15,200 mark on Wednesday.
While Sensex closed 1,147 points or 2.28 per cent higher at 51,444, Nifty climbed 326.50 points or 2.19 per cent to end at 15,245. Market cap on BSE rose to Rs 210.22 lakh crore.
Top Sensex gainers were Bajaj FinServ, Reliance Industries, Bajaj Finance, ICICI Bank, HDFC and Axis Bank rising up to 5.18%. Of the 30 Sensex components, 27 closed in the green. Here's a look at five factors which led to the market rally today.
Domestic indices took cues from the global markets which rose after US treasury yields eased from one- year high. Asian and European markets climbed after yield on the 10-year Treasury inched down to 1.40% early Wednesday.
In Asia, Hong Kong's Hang Seng rose 2.7% to 29,792.81. In Tokyo, the Nikkei 225 added 0.5% to 29,559.10, while the Kospi in Seoul picked up 1.3% to 3,082.99. The Shanghai Composite index advanced 2% to 3,576.90. Germany's DAX surged 0.9% to 14,169.37 and the CAC 40 in Paris added 0.8% to 5,857. Britain's FTSE 100 picked up 1.2% to 6,690.55. The future for the S&P 500 climbed 0.7% and that for the Dow industrials was 0.7% higher.
FIIs fuel rally
FIIs infused Rs 2,052.87 crore in the Indian equity market on March 2, according to NSE data. On March 1 too, FIIs bought securities worth Rs 125.15 crore. In February alone, FIIs put in Rs 42,044 crore into Indian equities leading to extension of rally in stock market barring few volatile trading sessions.
Strong economic data
The monthly Goods and Services Tax (GST) collection crossed Rs 1 lakh crore mark for the fifth time in a row in February. GST collection rose 7 per cent year-on-year to Rs 1.13 lakh crore in last month highlighting green shoots in the economy.
Services PMI for February rose to 55.3 last month on boom in domestic demand. The seasonally adjusted India Services Business Activity Index rose from 52.8 in January to 55.3 in February, pointing to the sharpest rate of expansion in output in a year amid improved demand and more favourable market conditions.
Metal and banking stocks
Metal stocks rose as the dollar slipped. On a year-to-date basis, the BSE Metal index is up over 25 per cent. Stocks that led the rally include names such as Tata Steel, NALCO, JSPL, JSW Steel, and Hindalco Industries. Banking stocks led the rally with BSE bankex zooming 1,094 points to 40,830. Bank Nifty too surged 948 points to 36,368.
Rohit Singre, Senior Technical Analyst at LKP Securities said, "One more positive session and index closed the day with supreme gains of more than two per cent at 15240 zone and formed a bullish candle for the third consecutive day. Bullish harami candle pattern showed a fantastic impact so far, going forward 15,150 will act as strong support followed by 15,100 zone if managed to hold above-said levels we may see current move to extend further towards 15,300-15,400 zone in near term."
"Markets across the globe were filled with optimism as the focus shifted from concerns over high valuation to a stronger economic recovery and earnings growth. The Indian market was on a rising streak echoing the global sentiment. The nifty bank which had a rough week so far took a breather and led the rally while consolidation was seen on auto stocks," Vinod Nair, Head of Research at Geojit Financial Services said.