Sensex jumps 429 points on vaccine hopes; HDFC, RIL, IT stocks lead rally

More than three shares advanced for every two that declined on the BSE.
The current rally has been liquidity driven, with no meaningful recovery in fundamentals, and that has been the cause of concern for many.
Mumbai: A surge in HDFC, Reliance Industries and IT heavyweights drove the BSE barometer Sensex 429 points higher on Thursday, in sync with the gains in world equities, as hopes of a much-awaited vaccine for Covid-19 boosted investor sentiment.

However, rising coronavirus infections in India continued to be a cause of worry as they crossed the six-lakh mark, mere five days after it had breached the five-lakh mark. While it took 110 days for coronavirus infections in India to reach one lakh, it took just 44 days more to rise past the six-lakh mark.

"The Indian indices traded in sync with global cues and ended the day with gains. Global indices were positive following news of encouraging trials of a vaccine being developed for the virus,” said Vinod Nair, head of research at Geojit Financial Services.

“Indian benchmark indices have sustained their momentum while upsides seem to be limited. Investors are advised to watch out for any signs of trend reversal and keep booking short term profits,” Nair added.

The current rally has been liquidity driven, with no meaningful recovery in fundamentals, and that has been the cause of concern for many.

“Fundamentals are just going to (get) thrown away at the moment and liquidity rules the way. You know we are all wearing rose-tinted glasses,” Andrew Holland, CEO, Avendus Capital said in an interaction with ET Now.

Benchmark index Sensex rose 429 points to close at 35,844 while peer Nifty climbed 122 points to shut shop at 10,552.

BSE snip 2xx
<p>Sensex winners &amp; losers (Source: BSE)<br></p>

A total of 22 of 30 Sensex stocks ended in the green with HDFC as the top contributor to Sensex’s gains following a 2.95 per cent jump.

Software majors Infosys and Tata Consultancy Services (TCS) rose 3.25 per cent and 3.14 per cent, respectively. Oil-to-telecom major RIL climbed 1.30 per cent.

Bulls were in charge with more than three shares advancing for every two that declined on the BSE. The broader market caught up with the rally in frontline indices. BSE midcap and smallcap indices logged 1.04 per cent and 0.92 per cent gains, respectively.

BSE IT index was the top sectoral gainer as it advanced 2.91 per cent. BSE Consumer Durables index followed next with a 2.73 per cent gain. BSE Bankex was the only sectoral index to close in the red, with a 0.19 per cent decline.

India’s third-largest private lender Axis Bank dropped 2.24 per cent as traders locked in gains after the stock rose 6.58 per cent in the previous session. The bank said it will raise up to Rs 15,000 crore. Its board has approved the fund-raising through the issuance of various instruments.

Shares of railway-linked companies rallied after the Indian Railways kicked off its plans to allow private entities to operate passenger trains on its network by inviting the request for qualifications (RFQ) for participation on 109 pairs of routes through 151 modern trains.

IRCTC, Rail Vikas Nigam and Ircon International rose 3.56 per cent, 7.14 per cent and 3.85 per cent, respectively. Among other rail-linked stocks, Titagarh Wagons, Texmaco Rail, and Cimmco rose 4.95 per cent, 12.86 per cent and 10 per cent, respectively.

Vodafone Idea extended Thursday’s losses and fell a further 1.18 per cent after the country’s third-largest telecom operator, earlier this week, reported a staggering Rs 73,878 crore of net loss in fiscal ended March - the highest ever by any Indian firm - after it provisioned for Supreme Court mandated statutory dues.

Foreign institutional investors (FIIs) who were net buyers of Indian shares through most of June, turned net sellers over the last four sessions of the month. While they pumped in a net of $2.5 billion or Rs 18,564 crore in Indian equities last month, they sold net of $467 million or Rs 3,525 crore in the last four sessions of June. Meanwhile, domestic institutional investors (DIIs) invested a net of Rs 3,812 crore in Indian shares last month.

Markets at a glance
  • Sensex up 1.21% or 429 points to 35,844
  • Nifty rises 1.17%, or 122 points to 10,552
  • 22 of 30 Sensex stocks close higher
  • Top Sensex gainers: M&M up 6.05%, Titan 3.98%, Tata Steel 3.43%
  • Top Sensex losers: Axis down 2.24%, HUL 0.85%, Kotak Bank 0.35%
  • Market breadth positive; advance decline ratio at 1.6:1
  • Broader market catches up; BSE midcap up 1.04%, smallcap 0.93%
  • BSE IT top sectoral gainer, up 2.91%; Nucleus Software up 5.31%, Infibeam Avenues 5%
  • BSE Consumer Durables up 2.73%; Titan leads, Symphony up 3.61%
  • BSE Bankex sole loser, down 0.19%; Axis, Kotak Bank lead decline
  • Govt seeks pvt funds to run trains; railways linked stock jump
  • Voda Idea extends losses, down 1.18% on record FY loss

Who moved my market
  • Firm global equities
World stocks gained on Thursday as optimistic economic data from across the globe and hopes of a COVID-19 vaccine lifted sentiment ahead of the crucial US jobs data. MSCI’s broadest index of Asia Pacific shares outside of Japan rose 0.9 per cent, while the pan-European STOXX 600 rose 1.2 per cent.

  • Hopes of Covid-19 vaccine
A vaccine developed by German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer has shown potential and was found to be well tolerated in early-stage human trials. Separately, Sarah Gilbert, professor of vaccinology at University of Oxford said on Wednesday the team has seen the right sort of immune response in trials but declined to give a firm timeframe for when it could be ready, Reuters reported.

  • Rising Covid-19 cases
There has been no respite from rising coronavirus infections in the country, as the total coronavirus cases in India crossed the 6-lakh mark after 19,148 fresh infections were reported in the past 24 hours. The death toll went up to 17,834, including 434 fatalities in 24 hours.

What to watch out for
  • The continued surge in new coronavirus cases is a major cause of concern.
  • The direction of global markets will be closely watched as the domestic market tends to follow the cues.
  • Progress on a vaccine for Covid-19 treatment will be closely monitored.
  • The political and border developments between India and China will continue to be in focus.
  • The June quarter corporate earnings, which start trickling in from next week, will provide a better picture of the damage caused by the pandemic-induced lockdown.




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