After Sun Pharma’s crash on Tuesday, Indian stocks swung back into action on Wednesday. The BSE benchmark Sensex turned things around and ended the day up 323 points, thereby recording highest close in more than three months.
Market experts are view that the splendid show was primarily driven by bargain hunting in beaten-down stocks, including Sun Pharma, which is up 3.35 per cent on Wednesday.
“Indian stocks swung back as on Tuesday’s falls were deemed overdone, and investors hunted for value amid the price falls. It also helped that proposal to amend the land Bill so as to give more flexibility to states was seen favourably,” said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
There was considerable improvement in sentiment with the adoption of a select committee report on GST Bill by the Upper House of Parliament during the trading hours. Progress of rains and softer oil prices meant Reserve Bank of India (RBI) gets enough headroom to consider a policy rate cut, which pushed up buying activity.
Fresh buying, especially in refinery, banking, auto, power and metal provided further momentum. The 30-share Sensex took some early blows mainly due to initial selling, but quickly shaped up before settling the day at 28,504.93, up 322.79 points, or 1.15 per cent.
It had lost 281.17 points, or 0.99 per cent, in the past two days. The broader 50-share Nifty played along, surging 104.05 points, or 1.22 per cent, to 8,633.50.
The closing for both the benchmark indices is the highest since April 16. Of the 30 constituents, 22 ended with gains. Reliance Industries was the top gainer (4.26 per cent) while M&M, Sun Pharma, Bajaj Auto and HDFC too advanced.
On the contrary, lupin, TCS and Bharti Airtel suffered major losses, but sectorally, oil and gas, banking, auto and power took the centre-stage. Broader markets too aligned with the trend, with the BSE small-cap and mid-cap indices registering gains of 0.86 per cent and 1.30 per cent, respectively, on fresh buying from retail investors.
Pramit Brahmbhatt, CEO, Veracity Group, said, “local equities traded strong and added over one percent for the day. Indices gained mainly with the help of blue-chips which traded positively on value buying of shares.”
Most Asian stocks ended lower today tracking subdued corporate earnings numbers in the US while European stocks traded down. Key benchmarks in Singapore, Taiwan, Hong Kong, Japan and South Korea all fell up to 1.19 per cent while indices in China and Indonesia marginally rose.