Benchmark indices staged a strong comeback on Wednesday after the recent rout as investors accumulated battered financials, auto and metal stocks amid rupee recovery from record lows.
The BSE Sensex, after a gap up opening of 34,493.21, rallied to hit a high of 34,858.35 before ending 461.42 points, or 1.35%, higher at 34,760.89.
The broader Nifty too reclaimed the key 10,400 mark. It touched a high of 10,482.35, before finally settling at 10,460.10, showing a significant gain of 159.05.10 points, or 1.54%.
Key indices stayed in the positive terrain through the session as buying activity gathered momentum.
The Sensex had lost nearly 175 points on Tuesday.
Sentiment also got a lift after the SBI, coming to the rescue of cash-strapped NBFCs, decided Tuesday to buy their assets to the tune of ₹45,000 crore, a move that will provide liquidity support to non-banking financing companies (NBFCs) facing headwinds after a series of loan defaults by IL&FS group firms.
“The market turned positive from over sold region led by financial stocks and marginal gain in rupee. Besides, RBI’s open market operation to buy government bonds will ease concerns about liquidity crunch in the system,” Vinod Nair, Head of Research, Geojit Financial Services said.
According to Rohit Srivastava, Fund Manager — PMS, Sharekhan by BNP Paribas, the stronger rupee aided the relief rally as bond yields had already cooled off in the last few days, easing the pressure on an extremely oversold market and resulted in fresh buying or short covering.
The rupee recovered by 34 paise to 74.05 (intra-day) against the dollar at the forex market Wednesday.
“Global markets were also at ease as US bond yields and the US Dollar cooled off yesterday. If the pressure remains lifted then these gains may continue in the coming days, Srivastava added.
Meanwhile, Brent crude, the international benchmark, was hovering around USD 84.30 a barrel.
“All eyes are shifting to earnings, which should provide some respite to the equity markets,” Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management.
Benchmarks largely benefited from value buying in beaten-down stocks, led by Maruti Suzuki, Tata Steel, Yes Bank and SBI amid a better trend at other Asian markets, traders said.
Stocks of NBFCs such as Dewan Housing climbed 16.08%, while Shriram Transport Finance rallied 13.48%. Bajaj Fiance gained 9.91% and Bajaj Finserv rose 10.06%.
Shares of Bandhan Bank rose 5.60% after the company on Wednesday posted a 47.28% jump in net profit to Rs 487.65 crore for the quarter ended September 30, 2018.
Aviation stocks, too, were in demand on reports of a likely cut in excise for aviation turbine fuel (ATF). Jet airways, Spicejet and InterGlobe Aviation gained up to 7.78%.
Auto stocks also gathered steam along with banks, infrastructure, metals and pharmaceuticals.
Axis Bank emerged as the biggest gainer in the Sensex pack, surging 6.62%, followed by SBI at 5.88%.
Other gainers were Maruti Suzuki 4.77%, Yes Bank 4.44%, ICICI Bank 4.18%, Vedanta 2.86%, Kotak Bank 2.66%, Adani Ports 2.59%, L&T 2.54% and Tata Motors 2.44%.
Also, Bharti Airtel 2.44%, IndusInd Bank 1.99%, Asian Paints 1.99%, Tata Steel 1.88%, Bajaj Auto 1.52%, HDFC 1.47%, NTPC 1.39%, HDFC Bank 1.22%, ONGC 1.19%, RIL 1.10% and HUL 0.82%.
Hero MotoCorp and ITC too ended higher.
Bucking the trend, Infosys, TCS, Sun Pharma, Wipro and Coal India dropped up to 2.38%.
The BSE realty index took the top position among sectoral indices, rising 4.44%, followed by consumer durables (3.77%), bankex (3.53%), capital goods (3.40%), PSU (3.12%), infrastructure (2.84%), auto (2.82%), power (2.69%), metal (1.88%), healthcare (1.80%), oil and gas (1.76%) and FMCG (1.66%) indices.
However, IT and teck indices ended in the negative zone, falling up to 1.52%.
The broader markets showed a firm trend, with the mid-cap and small-cap indices gaining 4.70% and 3.94%, respectively.
Asian markets, too, ended higher with Japan’s Nikkei rising 0.16%, while Hong Kong’s Hang Seng and Shanghai Composite Index gaining 0.18% each.
Stocks in Europe were trading in negative zone in mid-morning deals.
Frankfurt’s DAX fell 0.32%, while Paris CAC 40 down 0.56%. London’s FTSE too was down 0.27%.
