The BSE benchmark Sensex on Wednesday not just turned things around, but did it in style when it ended the day up 323 points, its highest close in more than three months.
The splendid show was primarily driven by bargain hunting in beaten-down stocks, including Sun Pharma, up 3.35 per cent.
“Indian stocks swung back as Tuesday’s falls were deemed overdone, and investors hunted for value amid the price falls. It also helped that proposal to amend the Land Bill so as to give more flexibility to states was seen favorably,” said Anand James, Co Head Technical Research Desk, Geojit BNP Paribas.
There was considerable improvement in sentiment with the adoption of a select committee report on GST Bill by the Upper House of Parliament during the trading hours. Progress of rains and softer oil prices meant RBI gets enough headroom to consider a policy rate cut, which pushed up buying activity.
Fresh buying, especially in refinery, banking, auto, power and metal provided further momentum.
The 30-share Sensex took some early blows mainly due to initial selling, but quickly shaped up before settling the day at 28,504.93, up 322.79 points, or 1.15 per cent.
It had lost 281.17 points, or 0.99 per cent, in the past two days.
The broader 50-share Nifty played along, surging 104.05 points, or 1.22 per cent, to 8,633.50.
The closing for both the benchmark indices is the highest since April 16.
Of the 30 constituents, 22 ended with gains.
Reliance Industries was the top gainer (4.26 percent) while M&M, Sun Pharma, Bajaj Auto and HDFC too advanced.
In stark contrast, Lupin, TCS and Bharti Airtel suffered major losses.
Talking sectorally, oil and gas, banking, auto and power took the centre-stage.
Broader markets too aligned with the trend, with the BSE small-cap and mid-cap indices registering gains of 0.86 per cent and 1.30 per cent, respectively, on fresh buying from retail investors.
Pramit Brahmbhatt, CEO, Veracity Group, said, “Local equities traded strong and added over one percent for the day. Indices gained mainly with the help of blue-chips which traded positively on value buying of shares.”
Most Asian stocks ended lower tracking subdued corporate earnings numbers in the US while European stocks traded down.
Key benchmarks in Singapore, Taiwan, Hong Kong, Japan and South Korea all fell up to 1.19 per cent while indices in China and Indonesia marginally rose.
Major indices in Germany, the UK and France were down up to 0.82 per cent.
“Despite a difficult start to the monsoon session of Parliament, the market has moved higher… Moreover, the market would also be influenced by Q1 FY16 results of large caps which will be announced in the next few days,” said Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.