The 30-share Sensex package jumped 835 points, or 2.28 percent, to 37,389. The NSE Nifty of 50 shares rose in par and rose 245 points or 2.26 percent to 11,050. If the benchmarks manage to sustain gains until the close, they will break their six-day losing streak, but both are poised to post big weekly losses.
The level of volatility also decreased as trading on the October series contracts began. India VIX was down 11.68 percent to 20.76.
Among the bluechips, HCL Tech gained the most, with an increase of 5.42 percent, followed by Bharti Airtel, Cipla, IndusInd Bank, TCS, Adani Ports, Bajaj Finance and Eicher Motors who added between 3 and 5 percent. SBI Life Insurance, BPCL and Kotak Mahindra Bank were some of the names that witnessed the selling pressure.
The broader market indices also rebounded with Nifty Smallcap advancing 1.84% and Nifty Midcap rising 1.60%. Among the industry indices, Nifty IT and Nifty Pharma were the top winners.
These are the key factors driving the markets:
The overnight rally in US tech stocks boosted confidence at home and helped get buyers back on the market. Meanwhile, the recovery in Asian markets was also constructive.
Wall Street stocks ended up positive in choppy trade Thursday, led by a stubborn resurgence in the tech sector, after initially selling out on higher-than-expected jobless claims. The Dow Jones Industrial Average was up 0.2%, the S&P 500 gained 0.30% and the Nasdaq Composite added 0.37%.
After a 2,750-point drop in Sensex, and even more in broader markets, the valuation of some of the stocks has dropped dramatically, drawing buyers back onto the streets.
Few analysts also said that the market crash has introduced investors to hoarding quality names. Gurmeet Chadha, co-founder and CEO of Complete Circle Consultants, said investors should continue to rack up declining quality stocks, but cautioned that one shouldn’t just buy just because they’ve seen a 2,000-point correction in one week.
Investors were also relieved by news that Democrats in the U.S. House of Representatives are working on a $ 2.2 trillion coronavirus package that could be voted on next week. If that attempt to pass the bill is successful, it can give a massive boost to the world economy and markets.
Meanwhile, Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin noted that up to $ 380 billion of the latest major coronavirus aid package from the US Congress has not been used. And they could help households and businesses if lawmakers pass it.
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