Equity benchmark indices bounced back sharply on Monday, as investors resorted to bargain buying in beaten-down stocks after buoyancy in global markets boosted sentiment and helped markets post its biggest gain in over two months.
Equity benchmark indices bounced back sharply on Monday, as investors resorted to bargain buying in beaten-down stocks after buoyancy in global markets boosted sentiment and helped markets post its biggest gain in over two months.
Fall in global crude oil prices which bolstered the domestic bourses amid good buying by domestic funds too helped the market to rebound sharply.
The 30-share BSE Sensex, which had breached the 28,000-mark in intra-day trade, ended just short of the crucial level with gains of 517.22 points or 1.88% at 27,975.86, while the broader 50-share S&P CNX Nifty reclaimed the psychological 8,400 mark and closed 150.90 points higher or 1.81% at 8,492.30.
In the previous seven trading sessions, the Sensex had plunged more than 1,000 points after weak global markets and geo-political tension in the Middle East dampened sentiment.
The broader market was upbeat with 2,065 advances against 743 declines on the BSE while 75 stocks were unchanged. Investors bought heavily into capital goods, FMCG, infrastructure, consumer durables and banking sector stocks leading the recovery.
Several frontline stocks posted significant gains led by HDFC, ITC, HDFC Bank, L&T and Axis Bank, Bharti Airtel and Idea Cellular. While shares of cigarettes-to-hotels conglomorate ITC rose on report the company may separate its core cigarette business following the regulatory pressure, telecom stocks were buzzing on the back of upbeat brokerage reports post the recently-concluded spectrum.
According to experts, markets are likely to hold firm in the coming few weeks on hopes the recent reform initiatives could translate into buying opportunity for investors after the recent fall.
G Chokkalingam, founder and managing director of Equinomics Research and Advisory Pvt Ltd, said, "The recent initiatives taken by the government in the form of reforms will soon start to show its effect in a positive way. Also, due to less liquidity pressure, one can expect the month of April to bring some good news"
With Sensex falling almost 9% in the first quarter of 2015, analysts are expecting the tables to turn soon. "We can see this rally continuing for another 5 to 8 days and Nifty to reach up to 8,700 levels. However, the week after the truncated first week of April is something to look at due to Greece deal happening about the same time" said A.K Prabhakar, an independent analyst. Although, the market has witnessed sharp volatility during the month, analysts are optimistic about the prospects in the near term.
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