The benchmark stock market indices closed the day's trading session on a positive note. All the sectoral indices ended higher with metal index up over 7 percent and all other sectoral indices up between 1-3 percent.
Sensex rallied 1,345 points, logging the biggest daily rise in three months. The broader Nifty was above 16,250 at the closing bell.
At close, the Sensex was up 1,344.63 points or 2.54 percent at 54,318.47. The broader Nifty was up 417 points or 2.63 percent at 16,259.30. About 2575 shares have advanced, 693 shares declined, and 112 shares are unchanged.
Among top Nifty gainers were Hindalco Industries, Tata Steel, Coal India, JSW Steel and ONGC.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd. said, Markets witnessed a sharp relief rally as the recent slump had put key indices in an oversold territory. Traders covered their short positions in several beaten-down stocks that propelled key benchmarks today. However, the rally could be short-lived as the unabated FII selling coupled with concerns of further rate hikes to tame inflation may fuel volatility.
On daily charts, Nifty has formed a long bullish candle which is broadly positive in the short term. For the trend following traders, 16150 would be the trend deciding level, above which the positive momentum is likely to continue till 16,380-16,450. On the flip side, a quick intra-day correction is possible if the index slips below 16,150. Below the same, the index could retest the level of 16,080-16,050, Chouhan said.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, Bulls roared back on Dalal Street as Nifty ended above 16,250. Metal pack were the star performers shine as key benchmark indices rose sharply amid positive Asian and European stock market cues in the backdrop of outweighed inflation and stagflation fears. Value buying backed by short covering came to bulls’ rescue. The biggest positive catalyst was China -- the biggest consumer of industrial products -- eased COVID-19 related restrictions. The optimism was so powerful that bulls shrugged off LIC’s poor listing performance (8 percent down at Rs. 873 from its issue price of Rs. 949). The next move could see Nifty bulls probably zip to its 200 - DMA of 17,253. For the index, support is seen at 16,000 and below the level, Nifty could swiftly move to 15,671 mark.
Mohit Nigam, Head - PMS, Hem Securities said, the benchmark indices made a gap up opening today and ended the day with stupendous gains. Indian indices took positive cues from its Asian peers who were trading with firm gains. Investor sentiments were uplifted after the newly elected president of industry body CII Mr. Sanjiv Bajaj said that RBI’s decision to hike interest rates and likelihood of good monsoon will keep the inflation under control. Good buying was witnessed in Nifty Metal after the announcements that china is planning to reopen shanghai after almost 6 weeks of lockdown.
On the technical front, the key resistance levels for Nifty50 are 16,500 and on the downside 16,000 can act as strong support. Key resistance and support levels for Bank Nifty are 34,800 and 33,500 respectively, Nigam added.
Palak Kothari, Research Associate, Choice Broking said, the Nifty has given breakout of horizontal line which suggest buying from lower levels. In addition, Nifty has been sustained above 21& 50-HMA which indicates Northward direction for the upcoming session. However, the momentum indicators RSI & Stochastic were trading with a positive crossover and reversed from the oversold zone which is a sign of reversal in the Nifty. The Nifty may find Strong support around 15,800 levels, while on the upside 16400 may act as an immediate hurdle for the Nifty crossing above the same can attract fresh buying. On the other hand, Bank nifty has support at 33,800 levels while resistance at 35,500 levels, Kothari said.
Rupee closes at all-time low against dollar
Rupee slips 1 paisa to close at all-time low of 77.56 (provisional) against US dollar.
LIC lists at over 8% discount
LIC on Tuesday made a lackluster debut on stock exchanges on Tuesday, listing at over an 8 percent discount after a successful initial public offering (IPO) which fetched Rs 20,557 crore to the exchequer. As against the issue price of Rs 949, shares of LIC are listed at Rs 872, a discount of Rs 81.80 apiece, on the BSE. The stock is listed at Rs 867.20, showing a discount of Rs 77 apiece, on the NSE. LIC shares listed at a discount even as the benchmark BSE Sensex opened with gains and later soared over 2 percent.
April wholesale inflation at 15.08%, up from 14.55% in March
India's wholesale inflation gauged by the Wholesale Price Index rose to 15.08 per cent in April from 14.55 per cent in March, official data showed. The WPI inflation was 10.74 per cent a year ago. Reportedly, WPI has been in double digits for over a year now. The rate of inflation based on WPI Food Index increased marginally from 8.71 percent in March to 8.88 percent in April.
The high rate of inflation in April was primarily due to rise in prices of mineral oils, basic metals, crude petroleum and natural gas, food articles, non-food articles, food products and chemicals and chemical products in comparison with last year, an official statement said on Tuesday.
India export ban shakes global wheat prices
Wheat prices increased after India imposed a ban on exports, stoking pressure on food costs as tight global supplies roiled international markets. Futures traded in Chicago rose as much as 5.9 percent to $12.47 a bushel, their highest level in two months, Financial Times reported.Wheat prices have risen more than 60 per cent this year, driven up by disruption from Russia's invasion of Ukraine. The two European countries account for almost a third of the world's wheat exports.
FPI holdings in domestic equities down 6%
The value of foreign portfolio investors (FPI) holdings in domestic equities reached $612 billion in the March quarter, down 6 percent from the preceding quarter, according to a Morningstar report.
This was largely on the back of a massive sell-off by foreign investors and a correction in the Indian equity markets.
At the end of the March quarter, the value of FPI investments in Indian equities fell to $612 billion, which was lower than $654 billion recorded in the previous quarter, a fall of around 6 percent, the report noted. In March 2021, the value of FPI investments in Indian equities was $552 billion.
Global shares recover
Global shares recovered on Tuesday on optimism about an easing of China's crackdowns on tech and COVID-19, but concerns about rising prices and slowing growth worldwide set a nervy tone elsewhere in markets. European shares followed up a positive start in Asia, with the STOXX index of Europe's 600 biggest stocks up 1.7 percent and US stock futures, S&P 500 e-minis, suggesting Wall Street would follow suit.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 2.5 percent, but the index is still down 16.8 percent so far this year.
(With inputs from Reuters, Agencies)
