NEW DELHI: Indian stock markets on Tuesday recovered sharply and erased Monday’s losses as benchmark indices- Sensex and Nifty - surged over 2.50%. According to market experts, investors saw a good buying opportunity to enter the market after a tepid last week and Monday’s big fall. The surge was also supported by foreign investments and expectations of a robust Q1FY23 gross domestic product (GDP) number.
The Sensex ended with gains over 1,500 points at 59,537, its second-biggest single-day gain of this year, while Nifty50 settled above 17,650 levels, up 2.58% from the previous day’s closing. However, the US Federal Reserve’s hawkish tone on future interest rate hikes remains a concern.
Shrikant Chouhan, head of equity research (retail), Kotak Securities, said “Strong bounce back in local benchmark indices came on the back of recovery in Asian and European indices. Focus seemed to have shifted from hawkish Fed stance to expectations of a strong Q1 GDP numbers. Despite volatility and an uncertain global macro environment, the rally shows that India would remain a good long-term bet.” He added, “We are of the view that the short-term market structure has changed from negative to positive due to a strong pullback from lower levels. But due to temporarily overbought conditions, we may see range-bound activity in the near future.”
VK Vijayakumar, chief investment strategist at Geojit Financial Services, said: “It is important to appreciate the fact that valuations in India are high. Nifty is trading around 20 times forward earnings. MSCI India is trading at 100% premium to emerging market rivals. This calls for some caution. There is a possibility of further correction in the market in the near-term. Financials, capital goods, autos, telecom and FMCG are strong segments attracting investment.”
After losing 2.39 lakh crore on Monday when Sensex fell 861 points, investors gained Rs 5.65 lakh crore on Tuesday as market capitalisation of BSE listed firms surged to Rs 280.21 lakh crore from Rs 274.56 lakh crore on Monday. NBFC and banking stocks witnessed high buying on Monday and we’re the top gainer in the Sensex pack.
Rupee gains 45 paise, ends at 79.45 against USD
After hitting the lowest level against the US dollar on Monday, the Indian currency came back strongly on Tuesday as it closed 45 paise higher against the US currency. Rupee on Monday closed at 79.45 against USD on expectation of Government of India bonds getting included on global indices. Strong FII inflows also strengthened the local currency. Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd, sees rupee at 79.25/30 levels.