Value buying in banks leaves investors richer by Rs 2 lakh crore

Short covering by institutional investors, mostly in banking stocks helped Sensex (363 points) and Nifty (77 points) cover losses of last two sessions

Sensex and Nifty changed gears today after two consecutive sessions of fall leaving investors richer by Rs 2.02 lakh crore. Market capitalisation on BSE rose to Rs 123.62 lakh crore compared to Rs 121.60 lakh crore yesterday. Short covering by institutional investors, mostly in banking stocks helped Sensex (363 points) and Nifty (77 points) cover losses of last two sessions.

While Sensex ended 995 points higher to 31,605, Nifty gained 285 points to 9,314 today.

Top gainers were banking stocks with BSE bankex seeing a relief rally of 1465 points or 7.31% higher at 21,516. Intra day , the index gained 1,675 points to 21,725 compared to the previous close of 20,050.

The index is still down 43% in last one year and 41% since the beginning of the year.

Similarly, bank nifty closed 1,270 points or 7.28% higher at 18,710. Intra day, the index gained 1,434 points to 18,874. However, the index has lost 42% since the beginning of this year and fallen 44.90% during the last one year.

Vinod Nair, Head of Research at Geojit Financial Services said, "The 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."

Sensex ends 995 points higher on short covering, banking stocks outperform

Other sectoral gainers were IT stocks with BSE IT index closing 411 points or 3% higher at 14,146.

BSE finance index too gained 227 points to 4,250 followed by BSE capital goods index which rose 202 points to 11,442. On Sensex, top eight gainers belonged to banking and financial sector.

This Rakesh Jhunjhunwala-held stock falls 3% as firm logs zero sales in first six weeks of lockdown

Axis Bank (13.46%), ICICI Bank (8.97%), HDFC Bank (5.91%), IndusInd Bank (5.84%) , Bajaj Finance (5.84%) , Kotak Bank (5.58%) , SBI (4.76%)  and HDFC (4.60%) were top Sensex gainers.

On Sensex , 24 out of 30 stocks ended in green.

Rahul Sharma, research head, Equity99 Advisors said, "Despite weak global clues, markets witnessed a sharp bounce back on account of short-covering by foreign players ahead of derivative expiry. Banking stocks, which started trading on a weak note, witnessed sharp bounce-back ahead of the weekly bank nifty expiry on Thursday.

However, investors' and traders' sentiments continue to remain cautious as the coronavirus pandemic has been on a rise in the country. Chemical, agriculture, and pharma sectors continue to remain investors' safe bets in an otherwise clueless market where corporate earnings are expected to show a sharp fall in the coming quarters."

Market breadth was positive with 1,345 stocks closing higher against 974 ending lower on BSE. 178 stocks were left unchanged.

Rise in Sensex and Nifty came amid global markets surging after European Union proposed more economic stimulus. European markets rose Wednesday after the EU commission proposed a new 750 billion-euro ($825 billion) package of financial aid meant to ensure the region's economy recovery.