After four days of continued sell off in the equity markets, Indian benchmarks gained strong ground on Friday amid a global rally in stocks.
The 30-share Sensex gained 1,627.73 points, or 5.75%, to close at 29,915.96. The broader Nifty settled the day at 8,745.45, gaining 482 points, or 5.83%.
This was the first gain for the indices after four consecutive days of losses. The India VIX index, a barometer for volatility, also fell a little over 7% on Friday.
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The benchmarks of Hong Kong, South Korea, Taiwan, Indonesia, China, Malaysia, Singapore and Philippines all ended Friday with strong gains. “Indian markets bounced back on the back of positive global cues,” said Gaurav Dua, head, capital market strategy and investments, Sharekhan. “The news flow on COVID-19 continues to be mixed with an exponential jump in new cases in the U.S. though there is an improving trend in China. Volatility could persist in the near term,” he added. While most frontline stocks gained ground on Friday after falling to multi-year lows, many side counters lost ground as well, as a little over 1,000 stocks declined against 1,426 gainers.
Foreign investors, however, continued their selling activity with net sales pegged at ₹4,623 crore even as their domestic counterparts were net buyers at ₹4,367 crore.
In the Sensex pack, 28 of the 30 stocks gained on Friday with stocks like ONGC, HUL, Reliance Industries, TCS, Tata Steel, Asian Paints, HDFC, Tech Mahindra and ITC all gaining over 8% each.
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HDFC Bank lost 1.39% after research firm Bernstein downgraded the stock to ‘underperform’ citing concerns related to the bank’s higher exposure to unsecured consumer credit risk compared with other banks. The research firm cut its target price for the bank from the earlier ₹1,400 to ₹750.