Sensex soars 2,975 points, largest single-day gain

MUMBAI: A ceasefire between India and Pakistan lifted investor sentiment on Dalal Street on Monday, spurring the sensex and Nifty to their biggest single-day gain ever in terms of points. The day's rally also made investors richer by Rs 16.2 lakh crore, marking the biggest one-day gain in market capitalisation.

After an initial surge in the two leading indices, news about a US-China trade deal further boosted market sentiment, brokers and analysts said. At the close of Monday's session, the sensex was at 82,430 points, up 2,975 points or 3.7%, while Nifty was up 917 points or 3.8% at 24,925 points. At the closing level, the sensex was at an over seven-month high level. The day's rally also lifted India's market capitalisation to Rs 432.6 lakh crore, translating to just above the $5-trillion market cap mark again.

According to Devarsh Vakil of HDFC Securities, in addition to the thawing of geopolitical uncertainties, the US-China trade deal, the US-UK trade deal, the India-UK free trade agreement, and strong mutual fund subscription data for April are currently fuelling investors' sentiment in the domestic market. "Signs of easing of the US-China trade tensions also calmed investors' nerves," Vakil said. Stock futures on the US markets surged after the White House announced a trade deal with China, which also aided the domestic market rally, he said.

The rally was supported by foreign and domestic fund buying, but these were muted relative to the past few weeks. End-of-the-session data on the BSE showed that while foreign portfolio investors were net buyers at Rs 1,246 crore, domestic institutions were net buyers at Rs 1,448 crore.

Outside of the leading indices, investors were hugely bullish on midcap and smallcap stocks. As a result, while the midcap index on the BSE closed 3.9% higher, the smallcap index was up 4.2%.

In Monday's session, buying was across-the-board with IT, real estate, and metal indices leading the pack. However, select healthcare stocks closed deep in the red after Trump announced that the US would put a cap on all medicines exported into the country. For some Indian pharma majors, the US is a major export market, hence the selling in those stocks.

For Tuesday, market players are expecting another relatively steady market on Dalal Street, mainly on the back of a strong rally in the US market on Monday night. At 10pm, the tech-heavy Nasdaq Composite was up more than 3.5%, while both the Dow Jones and S& indices were up more than 2% each.

As investors shifted their focus to risky assets on the back of recent sentiment-boosting geopolitical and economic news, gold and silver prices suffered. In the domestic market, gold closed at Rs 93,700 per 10 grams, down over Rs 3,500 from Friday's level, while silver closed at Rs 94,300 per kg, down about Rs 1,500.