Sensex surges 742 pts, Nifty settles at 19,675; Eicher Motors up 5%, Veranda jumps 20%

Domestic equity markets opened with big gains on Wednesday, after a public holiday on Tuesday. Optimism over the nearing end to rate hike cycles after positive global economic data pushed the domestic equities higher. Eased down geopolitical crises also supported the global equities and led to all round buying on Dalal Street.

For the day, BSE's Sensex dropped 742.06 points, or 1.14 per cent, to end at 65,675.93. NSE's Nifty50 shed 231.90 points, or 1.19 per cent, to end the day at 19,675.45. Broader markets performed in-line with the headline indices as BSE midcap and smallcap indices added about a per cent. Fear gauge India VIX eased slightly to 11.14-mark.
 
Markets made a firm start and gained over a percent, tracking upbeat global cues. After the gap-up start, Nifty remained in a narrow range in the first half however buying in select heavyweights pushed the index higher as the session progressed with all sectors participated in the move.

"Nifty has decisively crossed the trend line hurdle and looks set to test 19850 now. Interestingly, noticeable contributions from heavyweights like Reliance, Infosys and TCS, which were on the sidelines, largely fuelled the up move. And, we expect their participation to continue thus reiterating our view to maintain a “buy on dips” approach and focus on stock selection" he said.

All the sectoral indices settled in the green for the day. The Nifty realty index surged about 3 per cent, while the Nifty IT index also posted similar gains. The Nifty auto index gained about 2 per cent. The Nifty metal and oil & gas indices gained more than a per cent each.

In the Nifty 50 pack, Eicher Motors gained more than 5 per cent, while Tech Mahindra and Hindalco rose 4 per cent each. Infosys, Tata Motors, Wirpo, Tata Steel and LTIMindTree rose 3 per cent for the day. Among the laggards, Bajaj Finance shed about 2 per cent, while Power Grid and IndusInd Bank rose over a per cent each.

The market's strong gap-up jump in response to positive global cues on account of the softer than anticipated US and UK's inflation data, highlights the optimism for an end to the interest rate cycle, as evidenced by the ease in bond yields, said Vinod Nair, Head of Research at Geojit Financial Services.

"This is likely to draw FII flows into emerging markets, which is good for India considering the current better earnings season and the festive demand pick-up. The drop in the CPI for India also improved the mood. The rebound was broad based with IT, realty, oil & gas, metal, and auto leading the way," he added.

A total of 3,884 shares were traded on BSE on Wednesday, of which 2,273 settled with gains. 1,474 stocks ended the session with cuts while 137 shares remained unchanged. During the day, 392 shares hit their upper circuit, whereas 173 shares tested the lower circuit levels for the day.

In the broader markets, Veranda Learnings Solutions hit an upper circuit of 20 per cent, while Ahluwalia Contracts (India) gained about 18 per cent. Hindware Home Innovations, Kovai Medical Center & Hospitals and Gabriel India rose 12 per cent each. Star Cement and AGS Transact Technologies rose 11 per cent each for the day.

Among the losers, Rajesh Exports plunged more than 8 per cent for the day, while LA Opala RG tumbled over 7 per cent. Welspun Speciality Solutions, Prakash Industries and Nucleus Software Exports shed 5 per cent each. Natco Pharma, Igarashi Motors India and Religare Enterprises dropped 4 per cent each.

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