MUMBAI: The sensex on Tuesday rallied over 1,200 points from the day’s low to end nearly 700 points higher as banking and metal stocks led the surge. The relief rally came on the back of speculative buying in the mid-session, backed by short covering by traders to cut their losses, market players said. Foreign players, however, remained major sellers in the market while domestic funds were buyers.
The sensex opened the day about 250 points lower at 78,542 points and touched an intraday low at 78,297 points. However, the recovery took the sensex to an intraday high at 79,523 points and it closed at 79,477 points, up 694 points or 0.9%. Nifty, after hitting a low at 23,843 points, rallied to close at 24,213 points, up 218 points or 0.9%.
According to Vinod Nair of Geojit Financial Services, the domestic market experienced a sharp recovery, reclaiming most of the previous day’s losses despite uncertainty surrounding the likely downgrade in Q2 GDP forecast and closely contested US presidential election. “However, the recent rebound in domestic manufacturing activity data, along with the expected revival of consumption in the H2, are likely to support market sentiment. Metals led the gains, driven by the anticipation of significant stimulus from China later this week,” he said.
During the day, foreign portfolio investors (FPIs) were net sellers at Rs 2,569 crore, while domestic funds were net buyers at Rs 3,031 crore, BSE data showed.
Starting Oct, FPIs have been net sellers in the secondary market in each session. Over this period, they have net sold stocks worth more than Rs 1 lakh crore, translating to a little over $11 billion, NSDL data showed.
Market volatility is expected to remain elevated in the next few days, mainly because of the uncertainty about the outcome of the US presidential election. “Nervousness around the US presidential election outcome continues as it can result in major global policy shifts,” said Siddhartha Khemka of Motilal Oswal Financial Services. “The market’s recovery in the final hour (of Tuesday) was fuelled by short covering ahead of the US election results and after sharp fall (on Monday). We expect markets to remain volatile on the back of global factors with stock specific action as index heavy weights announce quarterly results during the next few days,” Khemka said in a note to investors.
