Markets trade in green: Sensex jumps 150 points, Nifty rises in opening trade; HDFC top gainer rallying over 2%

  • Starting on a highly volatile note, the 30-share BSE index swung nearly 200 points in early trade before quoting 97.09 points or 0.24 percent higher at 41,252.21

  • HDFC was the top gainer in the Sensex pack, rallying over 2 percent after the country's largest pure-play mortgage lender reported a near four-fold growth in net profit at Rs 8,372.5 crore for the three months to December

  • The rupee appreciated by 6 paise to 71.37 against the US dollar in early trade on Tuesday tracking gains in the domestic equity market and easing crude oil prices

Market benchmark Sensex jumped over 150 points in the opening session on Tuesday driven by gains in index-heavyweight HDFC following strong quarterly results.

At 10.15, the Sensex rose 114 points at 41,173.93 after slipping in early trade. The broader Nifty50 index was up 30 points or 0.25 percent at 12,140 levels.

Starting on a highly volatile note, the 30-share BSE index swung nearly 200 points in early trade before quoting 97.09 points or 0.24 percent higher at 41,252.21. Similarly, the broader NSE was trading 29.20 points, or 0.24 percent, up at 12,148.20, according to a PTI report

In the previous session, Sensex settled 458.07 points, or 1.10 percent, lower at 41,155.12, and Nifty closed 129.25 points, or 1.06 percent, down at 12,119.

HDFC was the top gainer in the Sensex pack, rallying over 2 percent after the country's largest pure-play mortgage lender reported a near four-fold growth in net profit at Rs 8,372.5 crore for the three months to December as against Rs 2,113.8 crore in the same period last fiscal year.

Hero MotoCorp, M&M, Maruti, Sun Pharma, SBI, Bajaj Auto and HDFC Bank were also trading with gains.

Top losers included PowerGrid, Nestle India, Bharti Airtel, Tech Mahindra, HCL Tech, NTPC and HUL, rising up to 1.24 percent.

 Markets trade in green: Sensex jumps 150 points, Nifty rises in opening trade; HDFC top gainer rallying over 2%

Representational image. AP

According to analysts, strong earnings of select blue chips lifted benchmarks. Broader markets continued to outperform signalling that investors are hoping for an economic revival in the upcoming Budget.

However, volatility remained amid a global selloff triggered by concerns over the impact of rapidly-spreading coronavirus on world economies, they added.

Foreign institutional investors (FIIs) remained net sellers in the capital market, as they sold shares worth Rs 438.85 crore on Monday, according to provisional exchange data.

Bourses in Japan and South Korea were trading with sharp losses, while markets in China, Korea and Hong Kong were closed for a holiday.

Brent crude oil futures fell 0.61 percent to USD 58.22 per barrel.

Rupee up

The rupee appreciated by 6 paise to 71.37 against the US dollar in early trade on Tuesday tracking gains in the domestic equity market and easing crude oil prices.

Forex traders said the rupee is trading in a narrow range amid fast-spreading coronavirus outbreak in China stoking fears about more trouble for the global economy.

The Centre on Monday decided to take steps for a possible evacuation of over 250 Indians from the Chinese city of Wuhan, the epicentre of the coronavirus outbreak and announced a raft of precautionary measures to deal with suspected cases.

In India, no case has been detected so far though nearly 450 people have been kept under observation in the country.

At the interbank foreign exchange, the rupee opened at 71.37, registering a rise of 6 paise over its previous close.

On Monday, rupee had settled for the day at 71.43 against the US dollar.

The domestic unit, however, could not hold on to the gains and was trading at 71.38 against the dollar at 0959 hrs.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell by 0.02 percent to 97.93.

The 10-year government bond yield was at 6.57 percent in morning trade. PTI

Stocks crumble as China virus toll mounts

Asian stocks extended a global selloff on Tuesday as China took more drastic steps to combat a deadly new coronavirus, while bonds shone on expectations central banks would need to keep stimulus flowing to offset the likely economic drag, according to Reuters.

As the death toll reached 106 in China, some health experts questioned whether Beijing can contain the virus which has spread to more than 10 countries, including France, Japan and the United States. No deaths have been reported outside of China so far.

China has already extended the Lunar New Year holiday to 2 February nationally, and to 9 February for Shanghai. On Tuesday, the country’s largest steelmaking city in northern Hebei province, Tangshan, suspended all public transit in an effort to prevent the spread of the virus.

With Chinese markets shut investors were selling the offshore yuan and the Australian dollar as a proxy for risk. Oil was also under pressure as fears about the wider fallout from the virus mounted.

MSCI's broadest index of Asia-Pacific shares outside Japan slumped 1 percent in early Asian trading on Tuesday. Japan's Nikkei was 0.9 percent down, Australian shares stumbled 1.4 percent and South Korea's Kospi index skidded 3 percent.

“The wildcard is not the fatality rate, but how infectious the Wuhan virus is,” Citi economists wrote in a note.

“The economic impact will depend on how successfully this outbreak is contained.”

Analysts said travel and tourism would be the hardest-hit sectors together with retail and liquor sales though healthcare and online shopping were seen as likely outperformers.

On Monday, key indexes for British, French and German equity markets slid more than 2 percent, as did pan-European markets on worries about the potential economic impact from the deadly virus. Stocks on Wall Street fell more than 1 percent.

E-Mini futures for the S&P 500 reversed some of the losses after slumping 1.6 percent overnight for their biggest single-day percentage loss since last October. They were last up to 0.25 percent.

Investors were still trying to figure out the potential impact from the coronavirus, given it would be at least a couple more months before official economic data are released.

“How do we fully price risk, if we have such limited visibility on how bad this could get, not just in terms of contagion, but the impact this will have on economics?” said Chris Weston, strategist at broker Pepperstone.

Analysts at JPMorgan said the coronavirus outbreak was an “unexpected risk factor” for markets though they see the contagion as a regional rather than a global shock.

“The rise in risk aversion and worry of a region-wide demand shock ... means the knee-jerk market reaction will likely be to richen low-yielding government bonds,” JPMorgan analysts wrote in a note.

“Concerns about coronavirus contagion has driven yields lower and is the latest risk of a series that have driven US Treasury (UST) yields far below what fundamentals indicate. We remain short 30-year UST.”

Treasury 10-year note yields dived as deep as 1.598 percent on Monday, the lowest since Oct. 10. Yields on two-year paper also fell sharply while Fed fund futures rallied as investors priced in more risk of a rate cut later this year.

Futures imply around 35 basis points of easing by year-end. The Federal Reserve is widely expected to stand pat at its policy meeting this week, but markets will be sensitive to any changes to its economic outlook.

Australian and New Zealand bonds gained on Tuesday as did Japanese government bonds (JGB) with yields on 10-year JGBs set for their fourth straight day of losses.

JPMorgan said they have not yet altered their developed or emerging markets forex forecasts though they were taking profits on their “bullish” EUR/USD positions and remain “considerably long” on Swiss francs which benefits from safe-haven demand.

Short build-up in the Aussie was another risk hedge. The currency was last down 0.1 percent at $0.6752, on track for its third straight day of losses.

The euro was steady at $1.1018.

The yen, which has been rising for the past five sessions, dipped slightly to 108.98 per dollar.

--With inputs from agencies

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Updated Date: Jan 28, 2020 10:24:20 IST