Continuing a rally for the sixth straight day, domestic stock markets logged sharp gains on Wednesday, with the benchmark Nifty 50 index rising above the 10,000 mark for the first time since March 11. The S&P BSE Sensex index climbed up as much as 1.96 per cent - or 663.16 points - to 34,488.69 during session, whereas the broader Nifty index spiked to as high as 10,176.20 - up 1.98 per cent compared to its previous close. Analysts say optimism on the economy's gradual exit from the coronavirus-induced lockdowns amid a pickup in the risk-appetite globally is supporting the markets.
However, both benchmark indices gave up more than half of those gains by the end of the session, as strong buying interest in banking and financial services stocks was met with selling pressure in IT and metal counters.
The Sensex closed 284.01 points - or 0.84 per cent - higher at 34,109.54 and the Nifty settled at 10,061.55, up 82.45 points - or 0.83 per cent - from its previous close. Those were the highest closing levels for both indices since March 11.
In the 50-scrip Nifty basket, 32 ended higher for the day. Top percentage gainers were Mahindra & Mahindra, Bajaj Finance, Kotak Mahindra Bank, Nestle, ICICI Bank and SBI, concluding the session with gains of between 2.58 per cent and 5.43 per cent. On the other hand, Zee Entertainment, NTPC, Bharti Infratel and Wipro - closing between 1.74 per cent and 1.99 per cent lower for the day - were the top Nifty losers..
HDFC Bank (settling up 2.12 per cent), Kotak Mahindra Bank (3.31 per cent) and ICICI Bank (2.34 per cent) alone contributed more than 150 points to the gain in Sensex.
A combination of factors, such as as easing of lockdown restrictions in the country and global cues, are propelling the markets, Anita Gandhi, director at Arihant Capital Markets, told NDTV. "Also, the India Meteorological Department (IMD) projected above-normal monsoon," she said.
Monsoon rains are expected to enter the country around June 1, the weather office said last week, marking the start of the four-month rainy season that is crucial for the country's farm-dependent economy. Weather conditions are "very likely to become favourable from June 1, 2020" for the monsoon onset over Kerala, according to the India Meteorological Department (IMD).
Nearly half of the country's farmland depends on annual June-September rains to grow crops such as rice, corn, cane, cotton and soybeans.
Britannia Industries shares ended 1.74 per cent higher at ₹nbsp;3,510.25 apiece on the BSE, having surged more than 7 per cent to a record high during the session, a day after the fast-moving consumer goods major reported a better-than-expected profit in the quarter ended March 31.
Shares in InterGlobe Aviation - which operates the country's largest airline IndiGo - climbed up nearly 13 per cent before finishing the session with a gain of 8.46 per cent at ₹1,025.55 apiece. On Tuesday, the company reported a consolidated loss of ₹871 crore in the January-March period, as against a profit of ₹596 crore in the corresponding quarter a year ago. InterGlobe said it planned to cut costs and phase out older planes to tackle the economic costs of coronavirus.
The rally was broad-based, with mid- as well as small-cap segments bouncing in line with benchmark indices Sensex and Nifty. The S&P BSE Midcap and Smallcap indices strengthened as much as 1.60 per cent and 2.26 per cent during the session, and ended 0.31 per cent and 1.24 per cent higher respecctively.
Market breadth lost steam but remained in favour of gains throughout the day, with the advance-decline ratio narrowing to 2:1 from 4:1 earlier. On the BSE, 1,658 stocks ended higher against 860 that succumbed to losses. On the NSE, 1,241 shares advanced while 568 declined.
Equities elsewhere in Asia followed a global rally as hopes of more stimulus bolstered riskier assets and overshadowed a host of other worries from the coronavirus to Hong Kong and growing US civil unrest. MSCI's broadest index of Asia Pacific shares outside Japan rose 1.63 per cent, while Japan's Nikkei benchmark strengthened 1.29 per cent. China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's KOSPI indices moved 0.07 per cent, 1.37 per cent and 2.87 per cent higher respectively.
The E-Mini S&P 500 futures rose 0.50 per cent in Asian trade, indicating a positive start for US markets on Wednesday.
European shares started the day on a positive note, with the United Kingdom's benchmark FTSE index last seen trading 1.32 per cent higher. France's CAC and Germany's DAX gauges were up 2.09 per cent and 2.46 per cent respectively at the time.
The World Bank said on Tuesday that it expects the coronavirus and resulting recessions to leave "lasting scars" on developing and emerging market countries, with the worst damage on oil exporters and those suffering financial crises.
(With inputs from agencies)