Improved global cues after US President Donald Trump hinted at sparing select countries from the proposed tariff hike in steel and aluminium imports delivered much needed relief to equity markets in Asia-Pacific and elsewhere on Thursday.
Dalal Street participants heaved a sigh of relief as Bombay Stock Exchange and National Stock Exchange benchmarks reversed a six-session loss-making run and steadied on short covering and bargain hunting by investors.
The session ended without a spell of profit booking by traders. The day’s highlight was badly bruised bank shares kicking back with gains on value buying. As buying accelerated in the last hour, the benchmarks managed to end with higher gains.
Leading lenders State Bank of India and ICICI Bank with HDFC were among heavyweight gainers. The day started on a positive note as other Asian markets, Japan, Hong Kong, Singapore, etc., in line with improved sentiment in Wall Street displayed upside bias. The relief rally extended to Dalal Street. The 30-share Sensitive Index of BSE closed 33,351.57 points up 0.96 per cent.
Broader market’s 50-scrip Nifty of NSE at 10,242.65 (+88.45) points gained 0.87 per cent. Nifty Bank and Nifty PSU Bank turned green on brisk buying as well as short covering to end the day at 24,477.65 (+343.55) points and 2,910.70 (+79.30) points, increasing 1.42 per cent and 2.80 per cent respectively. Earlier, Nikkei was 0.54 per cent up at 21,368.07 (+115.35) points.
Hang Seng of KH increased 1.52 per cent closing 30,654.52 (+457.60) points. Straits Times of Singapore increased 3,480.02 (+29.33) points, up 0.86 per cent. However, brokers are cautious and reluctant to predict that the “bull rally” correction that was waiting to happen for more than one year is finally over.
Analysts, however, feel stock markets are likely to make slow progress after recent sell-offs triggered by an abnormal jump in bond yields that led to stock hammering. The equity cracked on account of debt market volatility spreading from US to other economies, including emerging markets.
Investors have always considered bond investment as the most secure. That confidence took a jolt impacting stock markets as well. This resulted in heavy profit-booking by foreign portfolio investors in Dalal Street in February.
They continued to be net sellers in March. As on Wednesday they net sold shares worth `224.45 crore. Domestic institutional investors are the bigger net sellers as they also booked profit by selling `452.48 crore valued stocks.
The Punjab National Bank’s `12,636 crore letters of the undertaking or LoUs fraud only aggravated selling pressure particularly in financial stocks. About a dozen state run banks are now being directly under close scrutiny of Reserve Bank of India.
In the Sensex, 18 shares advanced and 13 declined. For Nifty it was 26:24. Top gainers in BSE benchmark included SBI `256.90, 4.16 per cent; ICICI Bank `297.45, 3.75 per cent; RIL Rs 911.50, 2.24 per cent; MnM `725, 2.13 per cent; and Axis Bank `519.55, 1.92 per cent.