Sensex surges nearly 700 points led by gains in financial stocks

The key benchmark indices opened on a positive note on Tuesday, led by gains in the banking and financial stocks.

At 10.53 am, the BSE Sensex was trading 693 points or 1.20 per cent higher at 58,666. Nifty50 was trading at 17,5166, up 216 points or 1.26 per cent. The midcap and smallcap indices rose to 1.18 per cent and 1.24 per cent respectively.

V K Vijayakumar, Chief Investment Strategist at said that compared to the sell-off in US markets last Friday the correction in the Indian market yesterday was relatively mild. This is a reflection of the resilience of the Indian market.

However, it is important to appreciate the fact that valuations in India are high. Nifty is trading around 20 times forward earnings. MSCI India is trading at 100 per cent premium to emerging market rivals. This calls for some caution, Vijayakumar said.

“There is possibility of further correction in the market in the near-term. Financials, capital goods, autos, telecom and FMCG are strong segments attracting investment," he added.

Among Sensex stocks, rose 4.15 per cent to Rs 16,755.40. , , and up 2.64 per cent, 2.44 per cent, 1.72 per cent and 1.57 per cent, respectively. , , and rose 1.56 per cent, 1.47 per cent, 1.39 per cent and 1.17 per cent, respectively.

The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, fell marginally to 108.82 level.

On Monday US Markets ended lower, Nasdaq down 1.02 per cent, Dow fell 0.57 per cent and S&P 500 ended 0.67 per cent lower.