Relief rally: Sensex ends 311 points higher after a three session crash

Bears for once took a backseat as key domestic share indices regained some of its lost ground after the recent slump, with investors resorting to short-covering in the recently beaten-down scrips helping the benchmark Sensex to edge past the 25,800-mark in intra-day trades. Despite the global markets uncertainty, stocks across the globe led by overnight gains in the US markets staged a comeback on Thursday even as investors continue to remain perturbed by the fragile state of global economy led by the lingering slowdown in China.[caption id=“attachment_2419952” align=“alignleft” width=“380”] Reuters[/caption] Along with this, the impending US Fed rate hike later this year coupled with fading economic growth back home and deficient monsoon gave investors the reason to turn risk averse. As a result, the gloomy mood took toll on the markets resulting in the Sensex plunging over 900 points in last three sessions. However, shrugging aside the worries, the 30-share BSE S&P Sensex today ended the session at 25,764.78, up 311.22 points, or 1.2 percent from previous close. Earlier during the day, the index boosted by all-round buying jumped 381 points to touch the day’s high of 25,835.41. The broader 50-stock CNX Nifty also ended firm at 7,823, up 106 points, or 1.4 percent. Market breadth ended strong with 1,710 stocks advancing against 969 declines on BSE. Globally, recovery in overnight US markets helped Japan’s Nikkei end its four-day losing streak, while key European indices were up over 2 percent in its ongoing trades. Today’s relief rally in the domestic market can also be partly attributed to the improved data for the services sector. The data showed services sector improved further in August as new orders received by private firms increased at the fastest rate in five months. The Nikkei India Services Business Activity Index, which tracks changes in activity at service companies on a monthly basis, rose from 50.8 in July to 51.8 in August, pointing to a faster, although modest, expansion in output. Despite the steady consolidation, concerns among the local traders also stem from the fact that overseas investors continue to exit domestic equities, with FIIs having sold shares worth Rs 1,573 crore on Wednesday despite the government’s decision to exempt foreign investors from the Minimum Alternate Tax (MAT). In August, FIIs sold shares worth Rs 17,000 crore, its biggest pull-out of funds from local equities in a single month since 2008. The recent selling allowed investors to latch upon the several blue-chip frontline shares today. Among the shares that form the Sensex pack, shares of Tata Steel surged 4.6 percent to Rs 229.65, Vedanta advanced 4.4 percent to Rs 98.05, Axis Bank rose 4.2 percent to Rs 486.40, HDFC moved up 4.1 percent to Rs 1,172, Hindalco gained 3.4 percent to Rs 77.20 and Maruti was up 2.9 percent at Rs 4,146.45. Among other gainers, Tata Motors, L&T, BHEL, Wipro, Bajaj Auto, ONGC, HDFC Bank and Bharti Airtel ended over 1-2 percent higher.