Sensex hit two-week high as it surges 416 points

Sensex hit two-week high as it surges 416 points

New Delhi: Due to the handsome gains in HDFC twins (HDFC Bank and HDFC), Infosys, IndusInd Bank, HUL and M&M, the domestic equity market showcased a spectacular show today. The BSE benchmark Sensex surged 416 points or 1.19 per cent which was the two-week high in the recent time.

There were few factors which fuelled up the rally today. As the month of May marked its end, the short coverings, F&O series gave a boost to the sentiment. The release of India GDP data later in the day also kept the investors positive.

Despite, the boost, the rally failed to stimulate midcap and smallcap stocks. There was a slide down in the BSE Midcap and Smallcap indices by 0.24 per cent and 0.57 per cent, respectively.

The top contributors to the rally today were the indices of the sectors like energy, FMCG, finance, IT, bank and oil & gas. Although resisting the positive market sentiment, the indices of basic materials, pharma, industrials, telecom, capital goods, consumer goods, consumer durables and realty remained subdued.

Let’s take a look at the factors that fuelled the rally today.

Short coverings

Markets witnessed some short covering in the later part of the session. As per the experts, there were chances that the market would see sharp moves, as some short covering might happen.

HDFC twins rallied

HDFC Bank and HDFC add more than 200 points in the BSE Sensex. HDFC Bank scaled fresh all-time high of Rs 2,150, as the counter witnessed robust buying ahead of the opening of FII buying window on June 1. On the other hand, country’s biggest mortgage lender jumped over 2 per cent today.

Positive global cues

Asian peers mostly in green as oil prices rebounded, Italy’s political turmoil eased and Chinese data topped forecasts. Chinese shares posted strong gains as investors cheered upbeat manufacturing and non-manufacturing data. Japanese shares closed higher on bargain hunting as concerns about Italy’s political turmoil receded. The firm opening of European markets further lifted the market moody today.

Monsoon and GDP

Predictions of normal southwest monsoon rains and expectations of an improved gross domestic product data due later in the day pushed the key Indian equity indices higher today.

Other factors

With Rs 14,000 crore GST refunds of exporters stuck in limbo, optimism also spread on the street after the CBIC laid down a procedure for revenue officers to fast-track clearances of exporters’ refunds.