In the new traditional trading year, Samvat 2076, Bulls who had given indication that they will make serious attempts to take control of the markets came through with their promise, taking back much of the lost ground. And the indices reflected their resolve. NSE’s Nifty ended the day with gains of 159.70 points or 1.37 per cent at 11,786.85 while BSE’s Sensex gained 581.64 points or 1.48 per cent to close at 39,831.84
The biggest reason for the come-back of Bulls was the reports from some auto companies’ sales on the festive weekend were better than last year’s. While the expectation of better sale month-on-month was already known on Dalal Street, the indications that sales might be better than last year was a positive surprise.
It was not only auto companies that did well. Both retail companies, and bigger retail chains of white goods indicated that sales had been better. Even premium clothing brands are reported to have shown better numbers.
Cashback, and other schemes, which some of the banks and NBFCs had started just before the festive season, were being able to show an impact on sales of white goods. This gave an indication that the last-mile connectivity in the financial sector, which had suffered, seems to be getting restored. Following on its back, consumption numbers are likely to get better, boosting consumption stocks.
Another noticeable feature of the trading on Tuesday was buying in stocks like Tata Motors which gained over 30 per cent in just two days. This came on the back of improved performance by the company that attracted a barrage of upgrades by foreign brokerages. The upgrades indicate that if there is a hope of a sustainable turnaround in a company or a sector, a large amount of foreign money would come chasing them.
While there are many quarterly results that are yet to come, the ones from important companies in several sectors have given a fair idea to the Street on what to expect from the sectors as a whole.
The change in sentiment is likely to continue further as the Street is abuzz with the hope that some positive changes in taxation on equity instruments are around the corner. With the economy showing signs of bottoming out, earnings might show an overall improvement in a quarter or two.
