Sensex soars 1200 points on global cues
Positive global cues and encouraging data from the banking sector fired up the bulls on Tuesday, resulting in the Sensex soaring by nearly 1277 points and investor wealth jumping by Rs 5.66 lakh crore.
The sharp rebound came as the Dow Jones Industrial Average soared over 765 points while the Nasdaq Composite rose 2.3 per cent as US treasury yields softened and an unexpected slowdown in the US Manufacturing PMI led to some optimism that the US Fed would slow the pace of policy tightening.
However, a key factor behind the rally was the positive domestic conditions as reflected by strong business updates given by commercial banks amid expectations of a strong festive season.
Among the lenders, Yes Bank reported a nearly 12 per cent growth in loans for the July-September quarter compared with the same period last year.
Its deposit growth stood at 13.2 per cent with low-cost CASA (current account and saving account) deposits increasing by 19.3 per cent during the quarter. Other banks have also reported double-digit growth in loans over the second quarter of 2021-22.
After opening the firm at 57506.55, the Sensex crossed the 58000 level and gained 1311.13 points during intra-day trades at 58099.94. The index subsequently ended at 58065.47 — a rise of 1276.66 points or 2.25 per cent.
On the NSE, the broader Nifty galloped 386.95 points or 2.29 per cent to end at 17274.30.
“Indices surged over 2 per cent buoyed by positive global cues and encouraging quarterly updates on advances and collections from banks during the second quarter.
“Ahead of the festive season, the Street is optimistic about retail demand across segments and we saw financials lead from the front today. Participation of the IT sector on Tuesday lent ammunition to the bulls as almost all sectoral indices ended in the green as we near the end of the Navratri festival.
Positive tailwinds at home amidst gloom elsewhere in the globe left bears stranded as the Sensex vaulted past 58000,” S. Ranganathan, head of research at LKP Securities, said.
Provisional data from the stock exchanges showed that foreign portfolio investors (FPIs) made net purchases worth Rs 1,345 crore in Tuesday’s trade.
The momentum in stocks rubbed off on the rupee which gained by 36 paise to close at 81.52 against the US dollar against the previous close of 81.88.
Global weakness in the greenback as reflected in a tepid Dollar Index also led to the domestic unit’s rise.