Sensex climbs Mount 48,000 as investors cheer Covid-19 vaccine nod

The benchmark Sensex on Monday crossed the 48,000-mark for the first time as investors cheered the approval to two Covid vaccines by the Indian authorities. 

The drug regulator, on Sunday, had given its final nod to the vaccines developed by AstraZeneca with Oxford University and Bharat Biotech. The Sensex ended the session at 48,177, following a gain of 308 points or 0.64 per cent. The Nifty, on the other hand, rose 114 points, or 0.8 per cent, to end the session at 14,133. 

It took five sessions for the Sensex to reach the 48,000 level from 47,000. 

However, banking stocks fell and Reliance Industries made only marginal gains after markets regulator Securities and Exchange Board of India (Sebi) fined the company. 

“Every dip is being considered by traders as an opportunity to buy. Global markets have kicked off the year on a positive note as investors across the globe are optimistic about economic recovery on reports of vaccine approvals & fiscal support,” said Vinod Nair, head of research, Geojit Financial Services.

Investors were also enthused by the signs of a recovery in India’s manufacturing sector. IHS Markit’s India Manufacturing Purchasing Managers’ Index (PMI) rose from 56.3 in November to 56.4 in December. A reading of above 50 indicates an improvement.

Goods and services tax (GST) collections in December, too, showed an unexpected year-on-year growth of 11.6 per cent and further boosted sentiment. The mop-up in December was the highest monthly collection. 

The equity markets in Asia rose on the back of optimism about the roll-out of coronavirus vaccines and hopes of a continued central bank and government support to economic recovery, especially in the western nations.

“We remain cautiously optimistic on the market and suggest continuing with the ‘buy-on-dips’ approach until we see a reversal in the trend. Going ahead, earnings, global cues, and progress on vaccine drive will dictate the trend,” said Ajit Mishra, vice-president (research), Religare Broking.

As many as 440 stocks hit their 52-week high, and 585 stocks were locked in the upper circuit on the BSE. The market breadth was positive with total advancing stocks at 2,081 and those declining at 1,012 on the BSE. Two-thirds of the Sensex components ended the session with gains. ONGC was the best-performing Sensex stock and ended the session with a gain of 4 per cent. 

TCS and HCL Tech rose more than 3 per cent. Barring two, all the BSE sectoral indices ended the sessions with gains. Basic materials and IT stocks gained the most, and their gauges rose 2.8 per cent and 2.7 per cent, respectively.

Foreign portfolio investors (FPIs) bought equities worth Rs 1,843 crore, while domestic institutional investors were net sellers to the tune of Rs 715 crore.

Analysts said the market momentum seen in the past couple of months is likely to continue on the back of sustained inflows, and improving macros trends.”As the long term market structure remains positive, we would advise investors to adopt Buying on Dips strategy to accumulate quality stocks,” said Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services.