Sensex ends at two-week high, surges 517 points on global rally

Bulls sprung back into action on the last day of the current month’s (August) futures & options expiry, as a massive round of short-covering fueled by an equally spectacular rally in global equity markets helped benchmark Sensex close at a near two-week high.

On Thursday, the 30-share BSE S&P Sensex, after surging 564 points to touch the day’s high of 26,302.77, ended the session at 26,231.19, up 516.53 points, or 2 percent. The broader 50-share CNX Nifty closed at 7,948.95, up 157.10 points, or 2 percent.

Market breadth ended on a firm note, with 2,000 stocks gaining against 678 losers on the BSE.

Renewed buoyancy in stocks today came after the Sensex had crashed more than 2,000 points in four of the last five trading sessions, as a deepening crisis in Chinese equity markets precipitated by its falling economy and the government’s subsequent move to devalue its currency to make exports competitive pushed investors worldwide in a tizzy.

Globally, investors took heart following the US Fed president’s comments that chances of a September rate hike appears dim in the wake of the recent sell-off across the global markets and the deteriorating health of the Chinese economy. On Wednesday, the US markets posted its biggest gain in four years with tech-heavy Nasdaq ending over 4 percent higher while Dow Jones gaining nearly 4 percent and S&P 500 was up 3.9 percent at close.

In Asia, Chinese markets also bounced back sharply with Shanghai Composite ending 5.3 percent higher and Hang Seng gaining 3.6 percent at close, while Japan’s Nikkei rose 1.1 percent, extending gains for second straight session. The positive rub-off effect was evident in European markets as well, as all the three key gauges were up over 2-3 percent in mid-day trade.

Domestic currency markets also took a breather from the sharp slide in recent sessions, as the rupee gained above 66 mark in early trades and appreciated by 14 paise to trade at 65.99 against the dollar towards the closing stages of the session.

Investors worldover will also be keenly following the annual Fed meeting in Jackson Hole, where the discussion will be around the status regarding the impending interest rate hike.

Back home, investors lapped up the recently beaten-down shares of commodity-related companies on hopes global commodity prices may hold steady after the recent crash.

Shares of Vedanta shot up 6.6 percent to Rs 91.15, Tata Steel soared 4.8 percent to Rs 225.85, ONGC rose 2.6 percent to Rs 230.75, Reliance Industries gained 1.9 percent to Rs 869.55 and Coal India was up 0.8 percent at Rs 361.

Other Sensex gainers such as HDFC vaulted 8.4 percent to Rs 1,195.20, Lupin advanced 4.8 percent to Rs 1,898.50, Cipla added nearly 4 percent to Rs 661.15, Axis Bank gained 2.6 percent to Rs 509.10 and ITC was up 2.6 percent at Rs 325.90.