Sensex regains 46k in pullback rally


MUMBAI: The sensex on Tuesday rebounded nearly 900 points from the day’s low to eventually close 453 points higher at 46,007 points. The rollercoaster ride came after BioNTech, the developer of one of the leading Covid-19 vaccines, said that the new virus strain could be managed with a variant of the vaccine.
On Monday, the sensex had lost 3% — or over 1,400 points — on news that the new strain was more virulent than the earlier one. On the NSE on Tuesday, the Nifty closed at 13,466, up 138 points on the day.
The latest pullback rally was supported by global cues after an overnight positive closing for the Dow Jones index in the US. IT stocks led the rally on Dalal Street, while selling in financials and Reliance Industries contained gains to some extent.

Infosys, TCS and HCL Technologies accounted for most of the sensex’s gains, while Kotak Bank, HDFC and RIL contributed negatively, BSE data showed. “Buoyed by global cues, the bulls were back in afternoon trade as IT stocks led the charge, well supported by pharma stocks,” said LKP Securities head (research) S Ranganathan. “Given the spirited pullback rally on Tuesday, it would be interesting to see how the tussle pans out (on Wednesday) to gauge the broader market breadth.”
Tuesday’s gains again came mainly on the back of strong foreign fund buying. End-of-the-session data showed that foreign portfolio investors were net buyers at Rs 1,153 crore, after pulling back Rs 324 crore from the market on Monday. So far this month, FPIs have net-bought stocks worth over Rs 52,800 crore, or $7.2 billion, according to CDSL data.
The day’s rally also made investors richer by nearly Rs 2 lakh crore with the BSE’s market capitalisation now at Rs 180.6 lakh crore. Tuesday’s 1% gain cooled the volatility to some extent. Compared to Monday’s closing at 23.2, the India VIX — a measure of market volatility using options prices on the NSE — declined by more than 5% to 22 by Tuesday’s close.
Technically, the bull run in the market could sustain if the Nifty continues to stay above the 13,550 level. While “if the market breaks the 13,100 levels, we may see another decline to 12,900-12,800 levels”, Kotak Securities EVP (equity technical research) Shrikant Chouhan wrote in a note. “On Wednesday, the Nifty would be hit hard at 13,550 and 13,650 levels.”
In mid-session trades on Tuesday night on the Wall Street, Dow Jones and S&P 500 indices were marginally down, while Nasdaq was in the positive territory with marginal gains. In case the gains sustain and there are no other negative developments overnight, Dalal Street could witness another session of flat to positive trading on Wednesday, dealers said.
In the forex market, the rupee lost another 6 paise to close at 73.85 against the US dollar on Tuesday in line with weaker Asian peers amid concerns over the new coronavirus strain. At the interbank forex market, the domestic unit opened at 73.95 against the US dollar and witnessed an intra-day high of 73.82 and a low of 73.95.On Monday, the rupee plunged 22 paise to end at a two-week low of 73.79 against the US dollar.



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