About three shares advanced for every two shares declining on the BSE, while in the Nifty, 41 stocks gained against nine declining.
The recovery, which
started in late trading in the previous session, continued on February 19 as
the percentage increase between each volatility in benchmark indices and
broader markets. Short-covering may be one of the reasons for the day's rally.
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The BSE Sensex gained
411.36 points to end at 41,305.74 and the Nifty gained 127.80 points to close
at 12,120.30. The Nifty Midcap and Smallcap indices reported a rally of 1.3%, favoring bulls.
About three stocks
advanced for every two stocks that fell on the BSE. The Nifty was up 41 stocks,
compared to nine declines.
Bharti Infratel,
Grasim Industries, Zee Entertainment, Coal India, HUL, Reliance Industries and
Bajaj Finance Nifty were the top gainers, up 2-6%. Tata Motors and Sun
Pharma lost the biggest with a loss of 1-2%.
Here are the five factors that lifted market sentiment:-
- Receding coronavirus
impact:
Businesses in China,
the world's second-largest economy has been forced to close manufacturing
plants and shut down services since mid-January following an explosion in cases
of coronavirus.
Rising deaths and
infections in the country have worried about the world economy as well as China.
Now, after an extended deadlock of about a month, several factories in China have resumed work, which
could happen after the announcement of cost-cutting measures for businesses,
but will be closely monitored as the outbreak is over.
CNBC said that about
20,000 manufacturing subsidiaries of more than 80% of state-owned enterprises
have resumed operations.
In a release on 18
February, the Chinese Foreign Ministry announced that all medium, small and
micro-sized businesses would not be required to contribute to staff old age
pension, unemployment, and workplace safety insurance plans from February to
June. The release said that large companies would have to pay only half from
February to April.
The virus that causes
respiratory distress has killed nearly 2,000 people in China and infected over
74,000.
Global markets:
Asian markets cheered
the news of the reopening of factories in China.
Japan's Nikkei was up
0.9% and Hong Kong's Hang Seng gained 0.4%, but China's Shanghai
Composite was trading 0.4& lower at the time of writing of this copy.
European markets also
traded higher as investors continued to monitor the spread of the virus and
fresh economic data. France's CAC, Germany's DAX and Britain's FTSE were up
0.3-0.5%.
- Rally in pharma,
metals and other stocks:
Metals stocks rallied,
with the Nifty Metal index rising nearly 2%, especially after the
factories in China resumed work.
Pharma was the biggest
gainer among sectoral indices, rising 2% after Aurobindo Pharma received
Establishment Inspection Report with ‘Voluntary Action Indicated’ status for
its Unit-IV. The stock gained 19% followed by Cipla, Cadila Healthcare,
Biocon, Glenmark and Dr. Reddy's Labs that rose 1-2.5%.
Among others, the
Nifty Bank index gained 0.6 percent and FMCG climbed 1.4%, whereas auto
remained under pressure, falling 0.2%.
- Cabinet’s boost to the
rural sector:
With an aim at
boosting farmer’s income, the Union Cabinet today approved Rs 4,460 crore for
dairy farming and also approved changes to the crop insurance scheme.
The Cabinet also
decided to raise the benefit under the interest subvention scheme from 2% to 2.5%.
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