Sensex snaps 4-day losing run on earnings optimism

MUMBAI: Equity indices returned to winning ways on Monday after a four-session losing streak as investors piled into energy, finance and IT stocks ahead of the earnings season.

Markets shrugged off lacklustre global cues and a depreciating rupee as investors wagered on healthy corporate earnings amid resumption of economic activities, traders said.

The 30-share BSE Sensex climbed 533.74 points or 0.91 per cent to finish at 59,299.32. Similarly, the NSE Nifty surged 159.20 points or 0.91 per cent to 17,691.25.

NTPC was the top gainer in the Sensex pack, spurting 4.08 per cent, followed by Bajaj Finserv, SBI, Bajaj Finance, Tech Mahindra, Tata Steel and Dr Reddy’s.

Only six index constituents finished in the red — Bajaj Auto, HUL, Titan, Nestle India, Kotak Bank and PowerGrid, dipping up to 0.75 per cent.

“After a week-long consolidation, the Indian market is back in action despite unfavourable global sentiments. The momentum is driven by the expectation of better Q2 earnings backed by recovery in economic activity, second wave fallout not being severe and in anticipation of a better outlook from festival demand.”

“The IT sector was under consolidation before the start of quarterly results, which has led to a marginal uptick as major companies are scheduled to announce their results, which can emerge as an opportunity if the results are in line with the robust outlook. RBI Monetary Policy Meeting is another key event that is being keenly watched by the market which is expecting no change instance,” said Vinod Nair, Head of Research at Geojit Financial Services.

S Ranganathan, Head of Research at LKP Securities, said indices remained buoyant through the day led by metals and PSU names, with the market breadth exhibiting positive momentum across midcaps and smallcaps.

“…select pharmaceutical and speciality chemical stocks had good buying interest today. This month is likely to witness almost a dozen companies going public aiming to mop up over Rs 200 billion,” he added.

Sectorally, BSE metal, power, realty, basic materials, industrials and healthcare rose as much as 2.66 per cent, while consumer durables ended in the red.

Broader BSE midcap and smallcap indices jumped up to 1.71 per cent.

Global markets remained under pressure due to inflation concerns and the debt crisis at China Evergrande Group.

Elsewhere in Asia, bourses in Hong Kong and Tokyo ended with heavy losses, while Shanghai and Seoul were closed for holidays. Stock exchanges in Europe were trading flat in mid-session deals.

Meanwhile, international oil benchmark Brent crude dipped 0.13 per cent to USD 79.38 per barrel.

The rupee tumbled 19 paise to close at 74.31 against the US dollar on Monday as a stronger greenback against key rivals and elevated crude oil prices weighed on investor sentiment.

Source: Press Trust of India

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