Sensex jumps over 400 points to 30,451, Nifty at 8,914-mark in opening session; Bharti Airtel, Kotak Bank shares up

The benchmark indices opened on a positive note on Tuesday. The equities tracked world markets higher on Tuesday, as the successful early-stage trial of a potential COVID-19 vaccine spurred optimism about a recovery in global economic growth, while a surge in domestic coronavirus cases capped gains.

Sensex surged over 400 points in opening session led by gains in HDFC twins, Bharti Airtel and Kotak Bank amid positive cues from global markets.

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After starting at 30,450.74, the 30-share index was trading at 394 points or 1.31 percent higher at 30,422.98.

Similarly, NSE Nifty jumped 91.10 points, or 1.03 percent, to 8,914.35.

Stock brokers. Representational image. Reuters.

With Tuesday’s gains, the Nifty 50 is on course to break a three-day losing streak largely due to disappointment around government's economic relief measures and an unabated rise in domestic COVID-19 infections.

In the previous session, the BSE barometer settled 1,068.75 points or 3.44 percent lower at 30,028.98, while the broader NSE Nifty plunged 313.60 points or 3.43 percent to 8,823.25.

Manish Hathiramani, Index Trader and Market Analyst, Deen Dayal Investment, told Firstpost, "The markets have opened with a gap-up of about 130 points. This should not be misconstrued as a trend reversal. The trend continues to remain downward. Traders can utilise these upmove with appropriate risk reward ratios and short the market. A pullback is quite possible but the overall trend continues to remain bearish," he said.

Foreign portfolio investors offloaded equities worth Rs 2,512.82 crore in the capital market on Monday, provisional exchange data showed.

According to traders, hopes of a vaccine for COVID-19 enthused global investor sentiment.

In a significant development, an American biotechnology company Moderna has said its initial vaccine tests in people have shown promising results and can stimulate an immune response against the coronavirus.

However, the rising number of cases in the country kept market participants cautious, they said.

The number of COVID-19 cases in India spiked to 1,01,139, while the death toll rose to 3,163, according to the health ministry.

Globally, the number of cases linked to the disease has crossed 48 lakh and the death toll has topped 3.18 lakh.

Rupee up 20 paise against dollar

The rupee rose 20 paise to 75.71 against US dollar in early trade.

It appreciated 20 paise to 75.71 against the US dollar in early trade on Tuesday as initial success in COVID-19 vaccine trial boosted investor sentiment world over, according to a PTI report.

Forex traders said besides the encouraging results in COVID-19 vaccine trial, higher opening of domestic equities and weakening American currency supported the local unit.

At the interbank foreign exchange, the rupee opened at 75.71, registering a rise of 20 paise over its previous close.

On Monday, the rupee had settled at 75.91 against the US dollar.

Asia shares, oil rally on vaccine hopes, euro at two-week highs

Asian shares jumped on Tuesday and oil extended gains on optimism the global economy would recover quickly following a successful early-stage trial of a coronavirus vaccine, while the euro hovered near a two-week top.

MSCI’s broadest index of Asia Pacific shares outside of Japan rose 1.5 percent to two-week highs, Reuters said.

Australia’s benchmark index and Hong Kong’s Hang Sang were the lead gainers, up 2 percent each, South Korea added 1.8 percent while China’s blue-chip index climbed 0.8 percent.

Japan’s Nikkei added 2 percent to the highest since early March.

The gains followed a rally on Wall Street overnight after data from Moderna Inc’s COVID-19 vaccine, the first to be tested in the United States, showed it produced protective antibodies in a small group of healthy volunteers.

The positive early test results boosted sentiment as investors wagered on a faster-than-expected economic recovery.

Analysts, for now, expect a steep contraction in world growth with the outlook for 2021 still uncertain with no approved treatments or vaccines for COVID-19 currently.

Experts predict a safe and effective vaccine could take 12 to 18 months to develop.

On Wall Street overnight, the benchmark S&P 500 posted its biggest one-day percentage gain in almost six weeks, gaining 3.15 percent. The Dow Jones Industrial Average rose 3.85 percent and the Nasdaq Composite added 2.44 percent.

“It may be the case that central bank liquidity is chloroforming markets to overlook risks such as overleveraged corporate and government balance sheets, growing COVID-19 case numbers, growth holes and a slow recovery path,” analysts at Perpetual wrote in a note.

E-minis for the S&P 500 were off 0.2 percent in Asian trading.

The vaccine optimism sent treasury yields surging overnight as investors dumped bonds, while gold came off its peak. Spot prices were last up 0.4 percent $1,739.2 an ounce.