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Markets bounce back on firm European cues

IT stocks hog limelight, Sensex gains 452.73 points

As Sensex crosses 50k, valuations do look stretched
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As Sensex crosses 50k, valuations do look stretched

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Mumbai: The Sensex made an emphatic comeback on Tuesday following the previous session's massive selloff, as European markets reversed losses amid expectations that the Covid-19 vaccines will be effective against a new virus strain in the UK. IT stocks led the recovery on Dalal Street, with pharma and select banking stocks also witnessing robust demand. After gyrating 968 points in a volatile session, the 30-share BSE Sensex ended 452.73 points or 0.99 per cent higher at 46,006.69. On similar lines, the broader NSE Nifty climbed 137.90 points or 1.03 per cent to 13,466.30.

HCL Tech was the top gainer among the Sensex companies, rallying 5.09 per cent, followed by Tech Mahindra, Infosys, PowerGrid, Sun Pharma, Nestle India and L&T. Only five index constituents finished in the red - Kotak Bank, Bajaj Finance, HDFC, RIL and IndusInd Bank, which slipped up to 0.94 per cent. European markets witnessed a sharp recovery after German pharmaceutical company BioNTech said it was confident that its coronavirus vaccine would work against the new UK variant.

The variant, detected mainly in London and the southeast of England in recent weeks, has sparked concern worldwide because of signs that it may spread more easily. While there is no indication it causes more serious illness, numerous countries in Europe and beyond have restricted travel from the UK as a result. The US Congress approving a $900 billion stimulus package also bolstered market sentiment, traders said.

"Market took an unexpected positive momentum in the afternoon, during a see-saw trading day, following the positive opening of the European market, which recovered from yesterday's sell-off. The sectorial rally was led by IT and Pharma stocks with other sectors also supporting the up move. "Volatility is expected to stay high in the near-term due to strict lockdown impacting economic recovery.

However, the market is expected to remain bullish in the medium to long term, backed by overall progress in economic activity in 2021," said Vinod Nair, Head of Research at Geojit Financial Services. All sectoral indices ended on a positive note, with BSE IT, teck, utilities, telecom, metal, healthcare and power rallying as much as 3.37 per cent. Broader BSE midcap and smallcap indices rose up to 1.09 per cent.

Elsewhere in Asia, bourses in Shanghai, Seoul, Hong Kong and Tokyo ended in the red. Meanwhile, the global oil benchmark Brent crude futures slipped 1.67 per cent to $50.06 per barrel. PTI)

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