Sensex gains by nearly 1,000 points; 3 reasons why bulls are dominating
On Friday, Sensex jumped around 975.62 points or 1.97 per cent to close at 50,540.48 levels while Nifty surged 269.25 points or by 1.81 per cent to close at 15,175.30 levels.
Here are the three major reasons for the uplifted mood in domestic equity markets that caused markets to rebound after two days of bearish environment.
The surge in banking, financial & IT stocks mainly drove the market rally on Friday. Amongst sectoral indices, BSE Bankex, BSE Finance, BSE Telecom and BSE Power etc were some of the shining indices. Besides, BSE Small-cap and BSE Mid-cap indices closed in green, up by 0.65 per cent and 0.85 per cent, respectively.
The major factors that contributed to Sensex’s rally of nearly 1,000 points include:
COVID-19 concerns & vaccines
In spite of the second wave of the COVID-19 pandemic that has hit the country badly, investors are still optimistic about the outcome. A majority of them are confident that the shortage of vaccines is a temporary hurdle. As various manufactures strive to ramp up the supply of vaccines, the momentum of the vaccination drive will pick up while new addition of the vaccines in the market will ease the burden. Additionally, decreasing number of fresh Coronavirus infected cases has brought about a hope that the worst is over. A further reduction in numbers will hopefully ease lockdown restrictions put in place by various state governments.
A mixed Q4FY21
The results season of Q4FY21 seems to have been comparatively peaceful with no major red flags. Overall, a list of companies have reported positive and improved financial & operational performance for Q4FY21, barring a few. Further, the management outlook for many has also been optimistic thereby, portraying the readiness to bounce back if faced with any hurdles.
Global cues
During the previous fortnight, technology stocks in the US saw a major decline but recently, the stocks have staged a recovery. Asian indices remained mixed on Friday after a rebound on Wall Street, breaking a three-day losing streak. Investors seemed confident by the latest US jobs data, highlighting fewer filings for unemployment benefits. This is a good indicator of economic recovery.