Markets end at six-month high, Sensex surges 364 points

The markets were also cheering the reopening guidelines for the entertainment industry, which were released by the government on Sunday.

Equities began the week with big gains, with the benchmark Nifty50 rising 94.85 points or 0.83% on Monday to close at 11,466.45, while the Sensex gained 364.36 points or 0.95% to close at 38,799.08. The markets ended at their six month highs, helped by financials.

The Nifty Bank rose 2.39% because of the optimism over more reopening guidelines coming from the government and developments regarding the Covid-19 vaccine.

Siddhartha Khemka, head – retail research, Motilal Oswal Financial Services, said: “Going ahead, the market may continue its positive momentum in the near term, driven by positive news flows around vaccine development and favourable policies. However, intermittent profit booking may continue in between given tepid economic data and lofty valuations.”

The Nifty50 traded throughout the session in the green, but ended the day slightly off the intraday high of 11,497.25. The markets were tracking the Wall Street gains overnight after the Donald Trump administration was said to be considering fast-tracking the development of the Covid-19 vaccine produced by Astrazeneca.

Meanwhile, the USFDA approved the use of blood plasma therapy for the treatment of the disease. This offset worries of rising Covid-19 cases around the world. The S&P 500, Nasdaq and Dow Jones were up between 0.39% and 0.69%.

The markets in China, Taiwan, South Korea and Hong Kong rose between 0.15% and 1.74%. The European markets were up 1.92% to 2.43%.

The markets were also cheering the reopening guidelines for the entertainment industry, which were released by the government on Sunday. The guidelines come at a time when the number of cases in India have surpassed the 3-million mark.

The Nifty Bank rallied by 2.39% to close at 22,833, with IDFC First Bank, Kotak Mahindra Bank, IndusInd Bank, HDFC Bank and ICICI Bank contributing to the gain.

However, brokerages such as Kotak Institutional Equities have forecast negative changes coming into the market. In its report, Kotak Institutional Equities, said, “We see potential negative changes to two of the current pegs of the market, expectations of stable or lower interest (discount) rates given limited room for the RBI to cut policy rates in light of persistently high inflation and expectations of a quick economic recovery given some stagnation in high frequency indicators at low levels. Broad market valuations are fair, although there is value in certain ‘Covid-recovery’ and typical ‘value’ stocks.”

Foreign portfolio investors continued to remain buyers in equities. On Friday, they bought shares worth $53.9 million, according to provisional data, while domestic institutional investors sold stocks worth $32.98 million.

The futures and options segment on the NSE witnessed a turnover of Rs 13.3 lakh crore, against the six-month average of Rs 14.9 lakh crore.

Major gainers on the Nifty were Zee Entertainment, Kotak Mahindra Bank, IndusInd Bank, Bajaj Finance and HDFC Bank, up by 4.76%, 3.49%, 3.3%, 3%, and 2.69%. Significant losers on the Nifty were Powergrid Corporation, M&M, Adani Ports and SEZ, Hindalco and Grasim, down by 2.01%, 1.18%, 1.09%, 1.07%, and 1.05%.