Mumbai, Aug. 22: The BSE Sensex today snapped a four-day losing streak to surge more than 2 per cent, stoked by a rally in metal stocks on China’s improved manufacturing data.
Market circles said the stocks also rose on the back of value buying following intense pressure in the last four sessions.
At the same time, the markets ignored the rupee's slide to a fresh record low and minutes of the Federal Open Markets Committee (FOMC) suggesting it was on track to taper its bond purchase programme.
The benchmark index opened at 17896.84, lower than the previous close of 17905.91, and dropped to a low of 17759.59. Value buying saw the Sensex recover and touch the day’s high of 18349.82 after which it closed at 18312.94, a gain of 407.03 points, or 2.27 per cent.
The broader Nifty index on the National Stock Exchange jumped 105.90 points, or 2 per cent, to 5408.45.
The biggest gain for the index in almost two months helped investors to become richer by Rs 1.17 lakh crore. The index had gained 519.86 points on June 28.
The rally was led by metal stocks which rose after the manufacturing index in China, the world’s biggest consumer of metals, showed an increase in August.
Higher openings in the European stock markets because of manufacturing in Germany expanding at a faster-than-expected pace also influenced the sentiment.
The Sesa Goa stock surged 13.10 per cent, while the Hindalco stock shot up nearly 11 per cent, followed by Sterlite Industries (10.42 per cent) and Tata Steel (10.22 per cent). The metal index climbed 8.23 per cent.
ITC, Reliance Industries, ONGC and TCS contributed a combined 184.46 points to the gains in the Sensex, which tumbled yesterday to its lowest level in more than 11 months.
The gain came despite Asian stocks ending lower with key indices in China, Japan, Singapore, South Korea and Taiwan coming under pressure.
While 28 scrips on the Sensex ended higher, the overall market breadth turned positive as 1,280 shares ended with gains, 985 finished with losses and 139 ruled steady.
Market experts, however, cautioned that any hint of withdrawal of the bond purchase programme of the US Federal Reserve could lead to foreign institutional investors exiting the markets, having an adverse impact on local equities.