Sensex cuts gains to end 167 points higher; Nifty below 8\,900

NEW DELHI: Benchmark equity indices on Tuesday failed to hold on to early gains, as optimism over a potential Covid-19 vaccine fizzled out amid a surge in virus cases in India past the 1,00,000-mark, tepid global setup and selling in index heavyweights.

Three stocks namely Reliance Industries, Hindustan Unilever and HDFC Bank, which alone account for over 29 per cent of Nifty weightage, ended lower for the day, capping gains for the index.

European markets were ruling lower by the time the domestic market shut shop. Besides, S&P500 futures also were trading in the red, suggesting a tepid start to the US markets later in the day. Last but not the least, a lack of strength in banking counters also hurt the market sentiment.

"Markets were dealing with the stress of rapid rise in COVID-19 cases and the extension of lockdown. The disappointment from the economic package has worsened the situation," said Ajit Mishra, VP - Research at Religare Broking.

"The fear of further deterioration in asset quality of banks and NBFCs has triggered a sharp fall in the banking and financials of late and we do not see this easing out anytime soon. Global positives have also failed to cheer the participants in recent instances," he said.

Sensex heavyweight Reliance Industries, which quoted positive for most of the session, ended 2.26 per cent lower at Rs 1,408.15, ahead of the kick start of its rights issue on Wednesday. HDFC Bank ended 0.59 per cent lower at Rs 831.50, after staying afloat for the better part of the session. Hindustan Unilever was weak all through the session. It closed 1,56 per cent lower at Rs 1974.50.

Key highlights

• The NSE barometer Nifty rose 56 points or 0.63 per cent to 8,879 after flirting with its strong resistance zone of 8,900-9,000.

• The BSE barometer Sensex added 167 points, or 0.56 per cent to close at 30,196, after paring over 500 points from intraday high.

• ITC, Bharti Airtel and HDFC contributed over 200 points to Sensex's rise. Stocks such as Reliance Industries, HUL, HDFC Bank and L&T contributed about 150 points in restricting the Sensex's gains.

• In the 30-pack Sensex stocks, Bharti Airtel was the biggest gainer as it rallied 11.34 per cent to Rs 599.15. The stock gained after strong operating performance for the March quarter. During the day, it hit a 52-week high of Rs 603 on BSE.

• Meanwhile, SBI shares hit a fresh 52-week low of Rs 152.50 during the session.

• A total of 235 BSE-listed stocks hit lower circuits for the day. These stocks included BSE 'A group' stocks such as SpiceJet, Lemon Tree and Credit Access Grameen.

• AstraZeneca, UPL, Ruchi Soya, Hathway Cable and Jubilant Life were among a few stocks which fell 7-11 per cent from their intraday highs during the session.

• Fear gauge VIX, which suggests the volatility in the market over the next 30 sessions, eased 4.42 per cent to 39.10.

Factors that moved the market

• Covid-19 vaccine hopes

A successful early-stage trial of a coronavirus vaccine cheered sentiment on Street. Data from Moderna Inc's COVID-19 vaccine, the first to be tested in the United States, showed it produced protective antibodies in a small group of healthy volunteers. The positive early test results boosted sentiment as investors wagered on a faster-than-expected economic recovery.

• Weak European markets

The euro and Italian government bonds continued on Tuesday to cheer German- and French-led plans for a 500 billion euro EU coronavirus recovery fund, though stock markets were suffering from fatigue after their best day in months. Europe's STOXX 600 index gave up an early rise to slip 0.4 per cent after surging 4 per cent in the previous session, Reuters reported.

• Rising Covid count

The rising number of cases in the country kept market participants on edge. The number of Covid-19 cases in India spiked to 1,01,139, while the death toll rose to 3,163, according to the health ministry. Globally, the number of cases linked to the disease has crossed 48 lakh and the death toll has topped 3.18 lakh.

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What should you watch out for?

• RIL's Rs 53,125 crore rights issue will kick off tomorrow.

• Keep an eye on US stocks and US-China trade war for further cues.