The Sensex rose more than 700 points in early trade on Wednesday, tracking advances in index heavyweights Infosys, Reliance Industries, and ICICI Bank ahead of the Reserve Bank of India’s monetary policy announcement.
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According to experts, market bulls are encouraged by positive sentiment in global markets following the observation by top US public health expert Dr. Antony Fauci that the Omicron variant is unlikely to be more severe than the Delta variant, removing market concern about the new variant’s economic impact.
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In early trade, the 30-share index was up 729.05 points, or 1.26%, at 58,362.70. Likewise, the Nifty gained 202.15 points, or 1.18%, to 17,378.85.
HCL Tech led the Sensex pack with a rise of more than 2%, followed by Infosys, Bharti Airtel, Tech Mahindra, L&T, Reliance Industries, and ICICI Bank. On the other hand, NTPC was the sole laggard.
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Sensex closed 886.51 points, or 1.56%, higher at 57,633.65, while the Nifty gained 264.45 points, or 1.56%, to 17,176.70.
According to exchange statistics, foreign institutional investors (FIIs) continued to be net sellers in the capital market on Tuesday, selling shares worth Rs 2,584.97 crore.
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“The RBI’s policy announcement is unlikely to be market-moving since the Monetary Policy Committee (MPC) is likely to retain the status quo on policy stance and rates,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
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A 10% pullback from the apex of a blazing bull market gives excellent purchasing opportunities, especially when the global equities background is ‘risk-on.’ This positive environment was reinforced by yesterday’s significant gain in the US market, he said.
However, he cautioned that while FIIs are in the sell mode, markets may face selling pressure at greater levels.
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Elsewhere in Asia, bourses in Shanghai, Seoul, and Tokyo were up significantly in mid-session trade, while Hong Kong was down. In the overnight session, stock markets in the United States climbed as well.
Meanwhile, Brent crude, the international oil standard, declined 0.42% to USD 75.12 per barrel. Rupee slips 2 paise to 75.46 against US dollar in early trade.