Sensex, Nifty snap 7-day losing streak as RBI assures steps to mitigate coronavirus impact; Sun Pharma, Tata Steel among top gainers

Mumbai: Snapping its seven-day falling streak, equity benchmark Sensex rallied 480 points on Tuesday after gains in index heavyweights Reliance Industries, ICICI Bank and Kotak Bank amid positive cues from global markets.

RBI to ensure orderly functioning of financial markets as COVID-19 spreads

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After a highly volatile session, the 30-share index surged 479.68 points or 1.26 percent to end at 38,623.70 with 28 of its constituents ending in the green.

The broader NSE Nifty jumped 170.55 points or 1.53 per cent to close at 11,303.30 led by gains in metal and pharma stocks.

Among Sensex stocks, Sun Pharma rose the most by 6.64 percent amid export restrictions imposed by the government on 26 pharma ingredients and medicines to boost local supplies.

Tata Steel, ONGC, UltraTech Cement, NTPC, PowerGrid, Reliance, Kotak Bank and HCL Tech were among the major gainers.

On the other hand, ITC and HDFC Bank ended in the red.

Domestic market sentiment got a boost after the Reserve Bank of India (RBI) said it was ready to take necessary action to ensure orderly functioning of financial markets.

“Globally, financial markets have been experiencing considerable volatility, with the spread of the coronavirus triggering risk-off sentiments and flights to safe haven,” the RBI said in a statement.

Spillovers to financial markets in India have largely been contained. Growing hopes of coordinated policy action to mitigate a broader fallout to economic activity has boosted market sentiment today, it said.

“Comments by central bank officials over possible policy initiatives to curtail economic impact held markets positive across the globe. Broad-based momentum was witnessed in Metals and Pharma while the strong dollar held IT stocks higher. With nations across the globe taking precautions over the virus, further long-term economic impact looks minimal,” Vinod Nair, Head of Research at Geojit Financial Services said.

Indian markets rose as the hopes of coordinated rate cuts got a boost from the action of Australian and Malaysian central banks, Deepak Jasani - Head Retail Research, HDFC Securities said.

“Hopes also rose from concall within the Group of Seven industrial powers is expected to issue a statement on Tuesday or Wednesday on countering the impact of the coronavirus outbreak,” he added.

Broader BSE midcap and smallcap indices rallied up to 1.75 percent.

All the sectoral indices closed in green with BSE Metal rising the most by 5.67 percent following gains in Tata Steel and Vedanta Ltd. BSE Power jumped 3.99 percent led by gains in NTPC and Powergrid. BSE Utilities rose by 3.93 percent while BSE Healthcare gained 3.77 percent following a rise in Sun Pharma and Dr Reddy’s.

Oil & Gas and Basic Materials also rose by more than 3 percent. BSE IT, metal, energy, auto and realty indices also rallied up to 2.52 percent.

Market breadth was positive as 1,234 scrips advanced while 1,165 stocks dropped on BSE. As many as 157 scrips were unchanged.

Brent crude oil futures rose 2.93 percent to $53.42 per barrel.

On the currency front, the Indian rupee depreciated 40 paise to 73.16 per US dollar (intra-day).

Bourses in Shanghai and Seoul ended on a positive note while Hong Kong and Tokyo settled with losses. Stock exchanges in Europe opened up to 2 per cent higher.

Paras Bothra, President of Equity Research, Ashika Stock Broking commented: “Domestic markets gained higher in sync with global markets after global central banks assured of their readiness to deal with the growing threats from the coronary outbreak.”

Besides, the number of new cases in China have hit the lowest, although there are growing concerns of its spread globally.