The benchmark Sensex posted its biggest single-day jump in nearly a month on Wednesday, as strong earnings reported by the financial sector helped revive sentiment earlier dampened by the surging number of cases.
While the infection tally continued to climb and Maharashtra extended restrictions on movement by another 15 days, investors chose to look beyond the short-term pain, said analysts.
The Nifty50 ended the session at 14,864, with a gain of 211 points or 1.4 per cent. The benchmark Sensex finished the session at 49,733, with a gain of 790 points, or 1.61 per cent — the most since March 30. In the past three sessions, the index has rallied nearly 4 per cent. However, it is still down 5 per cent from its all-time high logged in mid-February.
Bajaj Finance rose 8.3 per cent, the most among Sensex components, after it posting a 30 per cent year-on-year growth in net profits for Q4.
Shares of ICICI Bank added another 4 per cent after the lender posted strong earnings over the weekend. IndusInd Bank, Bajaj Finserv, and Kotak Mahindra Bank were the other top Sensex gainers.
“Earnings have been good, which has kept the sentiment positive, and the narrative coming out of those companies has also been positive. The problem we have is more towards vaccination, which will be key now. Global markets remain positive; all PMI numbers coming out of the US, the UK, and rest of Europe have been powerful. Global indices could be a bit hot in the summer thanks to reopening trades,” said Andrew Holland, CEO of Avendus Capital Alternate Strategies.
Global indices traded mixed on Wednesday as the US bond yield rose ahead of the Fed policy meeting.
The US consumer confidence index jumped to a 14-month high in April on increased vaccinations against Covid.
Additional fiscal stimulus allowed more businesses to reopen, boosting demand and recruitment by companies. The consumer confidence index is at its highest level since February 2020, just before the onset of the pandemic.
Investors were also enthused by the US government’s decision to offer help to India, including a range of emergency assistance, including oxygen-related supplies, vaccine materials, and therapeutics.
The declining Covid cases in Maharashtra and financial capital Mumbai also boosted sentiment.
Last week, the indices logged their third consecutive weekly loss on Friday as the second wave of infections raised concerns over business recovery because of lockdown-like curbs imposed across many states.
India, at present, has close to 2.9 million active cases, according to the ministry of health and family welfare.
Market players said India, which has been underperforming most global indices since two months, is now playing catch-up.
“Barring any other widespread impact of Covid infections and resultant lockdowns in tier-II and tier-III cities, the Nifty can be expected to trade towards its lifetime high in May,’’ said S Hariharan, head (sales trading), Emkay Global Financial Services.
While 239 stocks hit their 52-week highs on Wednesday, 310 stocks hit their upper circuit.
Market breadth was also positive, with 1,792 stocks advancing and 1,173 stocks declining.