Good start to the week: Bulls surge with 611-point Sensex thump

After mostly being on a losing wicket this month, bulls regained their mojo on Monday.

Buoyed by a rally in global shares, the BSE Sensex rose 610.80 points, or 1.83%, to close at 33917.95, its biggest single-day in 17 months.

The last biggest single-day gain on Sensex was on March 1, 2016, when it closed over 777.35 points.

The NSE Nifty on Monday surged 194.55 points, or 1.90%, to close at 10421.40, with 47 of 50 stocks in the index advancing. The surge added Rs 1.78 lakh crore to investor wealth.

The sentiment was driven by a global rally after jobs data showed that US economy was on strong growth path and easing trade war fears, experts said.

Investors were also positive ahead of the Index of Industrial Production data that was released after market hours.

All sectoral indices, except bank stocks that are hit by PSU bank woes, advanced.

"The markets have corrected a lot following the global trends and I think it will continue to perform well in the near future. Everything has been positive including the IIP and CPI data and the third quarter results of the major large-cap companies will make a positive impact. The near-term market looks good," Rahul Shah, vice-president, equity advisory group, at Motilal Oswal Securities, said.

"The mid-cap stocks have been beaten and seen steep correction. They will underperform for some time," he said.

The sectoral gainers were BSE Metal (2.32%), BSE FMCG and Oil & Gas (2.13%) and BSE Basic Material (1.91%), while NSE PSU bank index fell 0.47%.

In the broader market, the mid-cap and small-cap indices closed in green for the second time this month, rising 0.76% and 0.56%, respectively.

However, there was a word of caution.

"This kind of gains will not sustain. There will be one or two more corrections before March 31," G Chokkalingam, founder and managing director of Equinox Research and Advisory Pvt Ltd said.

On banking stocks, he said half of the PSU bank stocks will find it difficult to recover, but will rebound after some time.

"Negative non-performing assets (NPA) for the majority of banks remains a concern. But PSU banks like Allahabad Bank have a good balance sheet and should not be affected much," he said.

Bharti Airtel surged the most 5.21% after its board approved foreign currency bond sale of $1 billion, lifting the BSE Telecom index 2.57% to the top position on Monday.

NTPC rose 4.33% after Moody's assigned a Baa2 rating to the proposed senior unsecured dollar notes, ITC rose 4.09% after GST Council kept the cigarette cess unchanged.

Auto stocks rose after domestic passenger vehicle sales increased by 7.77% in February.

Tata Motors rose 3.07%, Hero MotoCorp 2.75%, Maruti Suzuki 1.69%, M&M 1.02% and Bajaj Auto 0.75%. Coal India, Aurobindo Pharma and Tech Mahindra were the only losers, falling as much as 2.15%.

"The markets should stabilise and start looking up. They should hit new highs post Karnataka election results in April/May 2018. It can be as high as 12500. However, post June 2018, markets may slide slowly to even sub-10000 levels," said Purvesh Shelatkar, head of institutional broking at Monarch Networth Capital Ltd.

The foreign portfolio investors (FPI) bought shares worth Rs 374.65 crore while domestic institutional investors (DII) sold shares worth Rs 464.59 crore on Monday.

Trading was brisk across global markets. Shanghai Composite rose 0.59%, Singapore up 0.97%, Hong Kong's Hang Seng 1.93% and Japan Nikkei 1.65%. European markets were trading higher, with Frankfurt's DAX rising 0.52% and London's FTSE rose 0.04%.

"From January 23, midcaps have lost almost Rs 12 lakh crore, which was mostly due to the banks. The underperformance in the broader market will continue," Chokkalingam said.

IN A GLOBAL PARTY

• The sentiment was driven by global rally after jobs data showed that US economy was on strong growth path
   
• Investors were also positive ahead of the IIP data that was released after market hours