Mumbai, May 12 (PTI) Benchmark stock indices Sensex and Nifty recorded their biggest single-day gains in absolute terms on Monday, skyrocketing nearly 4 per cent, after India and Pakistan reached an understanding to stop military actions and US and China announced a deal to lower tariffs significantly.
After opening on a high note, the 30-share BSE Sensex soared by 2,975.43 points or 3.74 per cent to settle at a more than seven-month high of 82,429.90. During the day, it rallied 3,041.5 points or 3.82 per cent to a high of 82,495.97.
The 50-issue Nifty of NSE skyrocketed 916.70 points or 3.82 per cent to close at 24,924.70. In intra-day trade, the barometer zoomed 936.8 points or 3.90 per cent to 24,944.80.
Sensex and Nifty logged their biggest single-day gains in absolute terms on across the board buying led by IT, metal, realty and tech shares. Sensex had previously posted its biggest single-day gain of 2,507.45 points and Nifty by 733.20 points on June 3, 2024.
Following the sharp rally, Dalal Street investors became richer by Rs 16.15 lakh crore on Monday as markets. The market capitalisation of BSE-listed firms jumped by Rs 16,15,275.19 crore to Rs 4,32,56,125.65 crore (USD 5.05 trillion) in a single day.
Stock markets welcomed the understanding reached between India and Pakistan on Saturday to stop all firings and military actions on land, air and sea.
India launched ‘Operation Sindoor’ on early May 7 to destroy nine terror infrastructures in Pakistan and Pakistan-Occupied-Kashmir in retaliation to the Pahalgam terror attack.
“Confluence of positive geopolitical and economic developments – the ceasefire between India and Pakistan, coupled with a breakthrough trade agreement between the US and China – sparked the strongest daily market rally in recent times,” Vinod Nair, Head of Research, Geojit Investments Limited, said.
Sustained FII inflows, along with a resurgence in retail participation fuelled by expectations of a swift improvement in business sentiment, propelled today’s upside, he added.
“Adding to the positive sentiment were encouraging updates on the US-China trade deal, which further boosted investor confidence as the session progressed,” Ajit Mishra – SVP, Research, Religare Broking Ltd said.
The easing of geopolitical concerns and progress on global trade talks brought significant relief to the markets, reflected in a sharp drop in the India VIX volatility index, he added.
US and China on Sunday announced suspension of high tariffs for 90 days. After their talks in Geneva, the US agreed to cut tariffs on Chinese goods to 30 per cent from 145 per cent while China announced to lower its tariffs on US goods to 10 per cent from 125 per cent.
From the Sensex firms, Infosys jumped 7.91 per cent. HCL Tech, Tata Steel, Eternal, Tech Mahindra, Tata Consultancy Services, Axis Bank, ICICI Bank, NTPC, Reliance Industries and Bajaj Finance were the other major gainers.
Sun Pharma and IndusInd Bank were the only laggards from the pack. The broader markets also mirrored this strength, with Midcap and Smallcap advancing close to 4 per cent.
The BSE smallcap gauge surged 4.18 per cent and midcap index jumped 3.85 per cent.
All sectoral indices ended higher. IT zoomed 6.75 per cent, BSE Focused IT (6.74 per cent), realty (5.87 per cent), metal (5.24 per cent), teck (5.21 per cent), utilities (5.07 per cent), power (4.82 per cent) and industrials (4.24 per cent).
As many as 3,545 stocks advanced while 576 declined and 133 remained unchanged on the BSE.
Meanwhile, stock markets in Pakistan rallied following the understanding between the countries. Benchmark KSE-100 index jumped more than 9 per cent on Monday.
Among other Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 index, Shanghai’s SSE Composite index and Hong Kong’s Hang Seng settled higher.
Markets in Europe were trading in positive territory. US markets ended on a mixed note on Friday.
“Markets were on a roll and turned buoyant after the news of a ceasefire between India and Pakistan… Investors turned risk-on with safe-haven gold taking a beating while equities turned out to be clear winners on the back of broad-based buying support. With talks on global tariff seen on a smooth path, equities could gain traction going ahead,” Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said.
Global oil benchmark Brent crude jumped 2.88 per cent to USD 65.75 a barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,798.71 crore on Friday, after remaining net buyers for many days, according to exchange data.
Forex markets were closed on Monday on account of Buddha Purnima. PTI SUM MR MR
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