Sensex jumps 740 points, but market players still on edge

MUMBAI: Dalal Street on Wednesday saw a bounce back after the negative trend of the past two weeks. The sensex rose by 740 points or 1 per cent while Nifty reversed its 10-session losing streak with a 255-point (1.2%) gain. Positive global cues and short covering by traders and speculators aided the rally, market players said. Brokers and dealers, however, are cautious about the turnaround and warned investors to be on guard over the next few weeks.

The sensex opened in the green and picked up steam through the session to close at 73,730 points while Nifty too followed a similar path and closed at 22,338 points. The day's session added nearly Rs 8 lakh crore to investor wealth with BSE's market cap now at Rs 393 lakh crore.

"A key catalyst behind (Wednesday's) market surge was a statement from the US Commerce Secretary, indicating that the Trump administration might ease tariffs that had previously triggered a global market selloff," Sundar Kewat of Ashika Institutional Equity said in a note. "The US could announce a plan to gradually scale back tariffs on Mexican and Canadian goods under NAFTA, ensuring flexibility in trade negotiations."

Strong Asian markets also aided the rally in the domestic market. "Hong Kong's Hang Seng surged nearly 2% as China pledged fresh stimulus measures to offset trade tensions with the US. Japan's Nikkei also traded higher, further boosting confidence in global markets," Kewat said.

The day's strong gains in the market came despite a Rs 2,895-crore net selling figure by foreign funds in the stock market. Domestic funds were net buyers at Rs 3,371 crore, data on BSE showed.