Equity benchmark indices Sensex and Nifty perked up to end with remarkable gains despite starting on a weak note on Tuesday, driven by a buying rush in services and telecom shares amid hopes of a favourable US-India trade deal.
The 30-share BSE Sensex started on a negative note by plunging 411.32 points or 0.49 per cent to 83,124.03. The 50-share NSE Nifty, on the other hand, dropped 125.1 points, or 0.48 per cent, to 25,449.25 in early trade.
But both the benchmark indices made a strong comeback and closed the day with significant gains. The Sensex jumped 335.97 points, or 0.40 per cent, to settle at 83,871.32, while the Nifty climbed 120.60 points, or 0.47 per cent, to close at 25,694.95.
The domestic market opened on a subdued note amid concerns over potential implications of the Delhi explosion. However, it recovered smartly and closed at the day's high, supported by global cues as the US Senate passed a bill to end the longest-ever federal shutdown. The rally was sustained by gains in IT, auto, metal, and FMCG sectors.
Among the Sensex firms, Bharat Electronics Ltd, Mahindra & Mahindra, Adani Ports, HCL Technologies, Eternal, Infosys, Bharti Airtel, Sun Pharmaceuticals, Larsen & Toubro, Hindustan Unilever and UltraTech Cement did well. Bajaj Finance, Tata Motors Passenger Vehicles, Kotak Mahindra Bank, PowerGrid and Tata Steel were, however, among the laggards.
Bajaj Finance ended over 7 per cent lower as investors turned cautious after the company's lower Assets Under Management (AUM) growth guidance and rising signs of asset stress. Bajaj Finserv fell 6.26 per cent.
Investors are now awaiting the upcoming domestic inflation data, with expectations of continued moderation due to a steady decline in food prices -- raising prospects of further policy easing by the RBI. Looking ahead, earnings are expected to witness a robust rebound in the third quarter, underpinned by multiple domestic tailwinds, though much will depend on the successful completion of a trade deal with the US.
Foreign Institutional Investors offloaded equities worth Rs 4,114.85 crore on Monday, while Domestic Institutional Investors remained the net buyer of stocks worth Rs 5,805.26 crore.
President Donald Trump had announced on Monday that the US would soon reduce the tariffs imposed on India as the two nations moved closer to finalising a trade deal.
Also read: Sensex jumps 319 pts after 3-day decline
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