Sensex surges 602 pts in 4 sessions, almost erases Friday's Brexit-triggered sell-off

Domestic equity markets remained in the thick of action Thursday, with benchmark Sensex closing a tad below the crucial 27,000-mark as investors covered short positions on the F&O expiry day (June month). The recovery in other Asian indices and steady upmove in European counterparts also provided a major boost to local investors, which were also enthused by the seventh pay commission announcement made by the government a day before. [caption id=“attachment_2414292” align=“alignleft” width=“380”] Reuters[/caption] While the Sensex gained 259.33 points or nearly 1 percent to close at 26,999.72, the index managed to erase almost all of its losses of last Friday when the Brexit news had singed global markets, including India. In last four sessions of this week, the Sensex jumped 602 points, just two points shy of last Friday’s crash of 604 points. The broader 50-share CNX Nifty also ended firm today at 8,287.75, up 83.75 points, or 1 percent. Analysts say the market sentiment has changed significantly this week, with recovery in global markets partly boosting the recovery as experts viewed India could be least impacted from the the Brexit woes. In fact, the focus shifted back to monsoon, hopes of likely passage of GST bill in the monsoon session of parliament and June quarter corporate earnings season to start rolling by mid-July. Also, the Cabinet approving the seventh pay commission is expected to boost India’s consumption growth story, which also helped propelled the markets in last two sessions, said dealers. Broad market recovery can also be attributed to a partial bounce back in rupee against the dollar. In four sessions, the rupee appreciated 46 paise or 0.68 percent to trade at 67.50 against the greenback after declining 71 paise on Friday to end at 67.96. Surprisingly, foreign institutional investors were net sellers of equities to the tune of Rs 139 crore in last three sessions, while domestic institutional investors offloaded shares worth Rs 410 crore. This shows that retail investors and high net worth individuals could have entered at lower levels taking advantage of the last week’s steep fall. Among other Asian indices, China’s Hang Seng rose 1.7 percent, Nikkei rose 0.1 percent while Jakarta Composite jumped 0.7 percent. All the three key European gauges, too, were sailing in positive territory. Several frontline stocks witnessed significant buying support. Shares of Dr Reddy’s jumped 3.4 percent, NTPC rose 3.2 percent, Axis Bank gained 3.1 percent, Tata Motors moved up 2.7 percent and Tata Steel ended 2.7 percent higher.