The benchmark Sensex rebounded 1397 points on Tuesday in a volatile session as stocks reacted to US President Donald Trump delaying tariffs on Mexico and Canada amid China retaliating by imposing duties on US.
However, hopes of a 25-basis-point cut in the policy repo rate by the Reserve Bank of India (RBI) later this week led to shares ending in the positive territory.The 30-share Sensex opened on a higher ground at 77687.60 following a recovery in the Asian markets after the US announced the delay in tariffs on Mexico and Canada.
The bellwether index gave up some of the gains and fell to a day’s low of 77402.37 as China imposed counter tariffs on US products. But expectations of lower borrowing costs from the monetary policy committee (MPC) on Friday led to a steady buildup in buying momentum.
Subsequently, the gauge surged 1471.85 points or 1.90 per cent to a peak of 78658.59 and settled with gains of 1397.07 points or 1.81 per cent at a month’s high of 78583.81.
The NSE Nifty jumped 378.20 points or 1.62 per cent to 23739.25.
“The equity benchmarks demonstrated robust performance, with both the Sensex and Nifty recording substantial gains of nearly two per cent. This upturn was primarily attributed to the United States’ decision to suspend planned tariffs on Canada and Mexico.
“The market sentiment was decidedly bullish, evidenced by an advance-decline ratio of 1.79 on the BSE,’’ Devarsh Vakil, head of prime research, HDFC Securities, said.
Reflecting the buying in capital goods, Larsen & Toubro was the top gainer in the Sensex pack with its shares rallying nearly 5 per cent. It was followed by Adani Ports, IndusInd Bank, Tata Motors, Reliance Industries, UltraTech Cement and Asian Paints which rose up to 3.82 per cent.
On the losing side, ITC Hotels, Zomato, Nestle and Maruti fell up to 4.16 per cent.
Market circles said stocks were likely to consolidate around the current levels till Friday and react to news coming from the US. On Friday, the focus will be on the guidance on the future interest rate trajectory given by RBI governor Sanjay Malhotra.
Provisional data showed a divergent trade from what has been witnessed recently with FIIs being net buyers to the tune of ₹809 crore on Tuesday. On the other hand, domestic institutions were net sellers of nearly ₹431 crore.
The rally in the stock markets led to the rupee gaining against the dollar.
The domestic unit ended at 87.06 against the previous close of 87.18. This also came as the dollar index was off by nearly 0.42 per cent at 108.54 against the last close of 108.99.
