Sensex Jumps Over 600 Points, Snapping A Two-Session Losing Streak, But Risks Remain

Indian equities snapped a two-session losing streak on Tuesday, recovering partially as broader Asian equities edged up, tracking a late rally on Wall Street, with the Nasdaq ending sharply higher after Twitter agreed to Elon Musk's purchase offer.

Twitter ended 5.6 per cent higher on news that Elon Musk, the world's richest person, clinked a deal to pay $44 billion cash for the social media platform populated by millions of users and global leaders.

The 30-share BSE Sensex index jumped over 600 points to around 57,187, while the broader NSE Nifty rose over 1 per cent to about 17,135 on Tuesday, after both the indexes fell over 1 per cent in the previous session.

On Friday, the BSE Sensex had plunged 715 points or 1.23 per cent to close at 57,197, while the Nifty moved 221 points or 1.27 per cent lower to close at 17,172.

All the firms from the 30-share Sensex index were trading higher, with IndusInd Bank, M&M, Bajaj Finance, Sun Pharma, Hindustan Unilever, Infosys, ITC, Axis Bank, Bajaj Finserv and Titan emerging as the major gainers in early trade.

All major Nifty sub-indexes were trading in the green, with the Nifty Auto index leading the pack, rising 2 per cent early on Tuesday.

Nifty Energy index rose over 1 percent as oil prices rebounded while the fast-moving consumer goods sub-index rose about 1.7 per cent, having declined over 1.5 per cent on Monday.

Among individual gainers, Mahindra CIE Automotive surged 10 per cent after its March quarter net profit jumped to Rs 161.42 crore in the January-March quarter from Rs 10.09 crore in the same period a year ago.

Nifty components Bajaj Finance and HDFC Life Insurance were up nearly 2 per cent and 0.5 per cent, respectively, ahead of their March quarter results.

Still, global growth fears stoked by China's stringent COVID-19 curbs and an expected streak of aggressive Federal Reserve tightening are likely to sap risk appetite and weigh on world equities.

The stringent lockdown in China, and its proliferation as cases spread to other big cities like Beijing, is weighing on the economic growth outlook and investment sentiment, Manishi Raychaudhuri, Asia-Pacific equity strategist at BNP Paribas, told Reuters.

"If the lockdown situation persists for longer," it would impact China's economy significantly and "also have an impact on the supply chains across the world," he said.

What has pushed up the safe-have appeal of the dollar and rattled financial markets is the US Federal Reserve's signals for a very aggressive monetary policy path, with investors fretting that it could derail the nascent global economic recovery.

For domestic stocks, persistent capital outflows have also dented sentiment. Indeed, the latest stocks exchange data showed foreign institutional investors (FIIs) offloaded shares worth Rs 3,302.85 crore on Monday.