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Market recovers after Budget-day crash, Sensex surges 917 points

The broader market also participated in the rally on Tuesday with the BSE Midcap index rising 1.37% and the BSE Smallcap rising 1.29%.The broader market also participated in the rally on Tuesday with the BSE Midcap index rising 1.37% and the BSE Smallcap rising 1.29%.

Equity markets witnessed a broad-based rally on Tuesday, erasing the losses after the Budget announcement. Sensex surging 917.07 points to end the day at 40,789.38. Nifty50 rose 2.32% to close at 11,979.65 on Tuesday. The rally came on the back of gains made in the Asian market, led by falling crude prices as well as stability seen in the Chinese stock markets after Monday’s plunge.

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During Tuesday’s rally, investors added Rs 2.86 lakh crore in market cap. Tuesday’s surge came against the backdrop of a tepid earnings season. According to Bloomberg, 15 out of 31 Nifty companies that have reported quarterly earnings so far missed estimates. Domestic institutional investors have bought Rs 1,888.49 crore worth of Indian stocks on a net basis over the last two trading sessions.

The top gainers on Sensex were Titan, ITC and HDFC with shares of Titan closing 7.55% higher at Rs 1275.50 a piece. On the other hand, the only losers were Bajaj Auto and HUL.

Asian markets also closed in the green on Tuesday. This came after China’s Shanghai composite had plunged nearly 8% on Monday.

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“The (Chinese) markets were shut for a week because of the lunar holiday and that is why they reacted strongly. Some reports suggest that coronavirus spread rate is peaking out and so the global markets are trading favourably” said Sorbh Gupta, associate fund manager, Quantum Mutual Fund, before adding that the purchasing manager’s index numbers contributed to the rally.

Another market expert said Brent crude, which was trading at $54.74 per barrel on Tuesday after hitting $70 per barrel in January, also contributed to the rally.

The broader market also participated in the rally on Tuesday with the BSE Midcap index rising 1.37% and the BSE Smallcap rising 1.29%. The Bank Nifty closed 2.21% to close at 30,686.70. Sectorally, BSE Consumer Durables, BSE Metals and BSE Oil and Gas gained the most.

“The rally is likely to continue but after a few days there can again be a sell-off because there is no fresh positive trigger that can justify valuations beyond a point,” Deepak Jasani, head of retail research, HDFC Securities, said.

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