Mumbai: Equity benchmark Sensex surged over 800 points in opening session on Tuesday led by gains in index heavyweights Reliance Industries, HDFC twins and Infosys amid recovery in global equities. Both Sensex and Nifty tracked broader Asian peers, as unexpected upbeat factory data from China provided hope of a rebound in activity despite a spike in coronavirus cases back home.
After hitting a high of 29,316.80, the 30-share BSE barometer was trading 505.20 points or 1.78 per cent higher at 28,945.52. Similarly, the NSE Nifty rose 199.85 points, or 2.41 per cent, to 8,480.95.
Tata Steel, HDFC, Axis Bank, M&M, Reliance Industries, ONGC, ITC, HCL Tech and Titan rallied up to 3 per cent. On the other hand, IndusInd Bank plunged up to 15 per cent. Bajaj Finance, Bajaj Auto and Maruti were also among the laggards.
In the previous session, the 30-share BSE barometer ended 1,375.27 points or 4.61 per cent lower at 28,440.32, and the broader Nifty fell 379.15 points, or 4.38 per cent, to close at 8,281.10.
Foreign institutional investors (FIIs) turned net sellers in the capital market, as they offloaded equity shares worth Rs 4,363.61 crore on Monday, according to provisional exchange data.
The Indian rupee appreciated 10 paise to 75.48 against the US dollar in morning trade. Brent crude futures, the global oil benchmark, rose 2.16 per cent to $26.99 per barrel.
According to traders, despite concerns over the rising number of COVID-19 cases in the country and the economic fallout of the nationwide lockdown, investors are value-buying during each dip.
Other Asian equities, too, enjoyed a strong start following another rally on Wall Street with traders welcoming a surprise jump in Chinese factory activity, though analysts cautioned that the road ahead remained rocky for the global economy.
The World Bank also warned that fallout from the coronavirus pandemic could bring China's growth to a standstill, with even a best-case scenario seeing expansion slow to 2.3 percent from 6.1 percent in 2019.
Trillions of dollars pledged to offset the economic impact of the deadly virus have provided a semblance of stability to world markets, which were initially pummelled by the rapid spread of the disease, which has forced swathes of the planet -- and the economy -- into lockdown.
While the number of infections and deaths continues to rise, observers said traders appear to be getting used to the new normal, with some suggesting the sell-off in stocks may have seen its worst.
After another rally on Wall Street, which saw all three main indexes jump more than three percent, Asia picked up the baton.
Tokyo went into the break 0.8 percent better off, while Hong Kong and Taipei added more than one percent.
Sydney, which soared seven percent Monday on its best day in history, added another two percent, while Seoul was up a similar amount. Singapore, Manila, Jakarta and Wellington all rose more than two percent, while Shanghai added 0.7 percent.
China’s Good News
Adding to the more positive mood on trading floors was data showing China's manufacturing sector saw surprise growth in March, having been mauled in February as the country went into lockdown to tackle the virus.
China's Purchasing Managers' Index, a key gauge of factory activity, jumped to 52.0 from a record low 35.7 the month before. Anything above 50 is considered growth.
The National Bureau of Statistics said the number "reflects that over half of surveyed companies had improvements in their resumption of work and production from the month before". But it stressed "it does not represent that our country's economic operations have returned to normal levels".
And while the news out of Beijing is good, there were warnings of a wave of desperately bad figures to come from around the world and Gorilla Trades strategist Ken Berman said stock markets continued to be hostage to uncertainty.
"The Volatility Index (VIX) has been closely tracking the major indices throughout the bounce, and without a meaningful decline in the 'fear gauge', the rally remains vulnerable," he said in a note, adding that US jobs data this week would be more closely watched than usual.
Crude surged -- with WTI up more than seven percent -- following another battering Monday that saw the commodity hit an 18-year low after major producer Saudi Arabia said it would ramp up exports to a record 10.6 million barrels per day in May.
There was some relief after Donald Trump and Russian counterpart Vladimir Putin held talks on the crude crisis, which has been fuelled by the hit to demand by the coronavirus and a price war between Moscow and Riyadh.
Innes said Trump's call may have been an "attempt to get Russia to pull up a chair to the negotiating table with Saudi Arabia, or maybe even (looking at) loosening sanctions on Russia, as desperate times call for drastic solutions".
He said any sign of Moscow and Riyadh putting aside their differences would be positive but added that the market "is not entirely buying into it".
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