Mumbai: Stocks bounced back on Tuesday with value investors rummaging through the dust heap created after the relentless pounding over seven trading sessions — only to see the gains evaporate again amid an escalation in the tensions between Russia and Ukraine.
The 30-share Sensex zoomed 1112.64 points during intra-day trades to touch a high of 78451.65 as investors piled into beaten-down automobile, IT and banking stocks that languished in an “over-sold” territory.
However, the bellwether index retreated from the peak after Ukraine attacked Russia with US-made long-range missiles called the ATACMS (the acronym for Army Tactical Missile System, pronounced Attack ‘ems).
Moscow responded quickly with President Vladimir Putin signing a revised nuclear doctrine under which it warned that any conventional attack on Russia, supported by a nuclear power, would be regarded as a joint assault on the Russian Federation.
The decree allowed Russia to fire nuclear weapons in response to a conventional attack — potentially heightening the 33-month hostilities in the region.
The news sent a frisson of fear through the global markets with the Dow Jones Industrial Average tumbling 319 points, or 0.7 per cent, in early trades and the Nasdaq ceding 0.5 per cent.
Selling pressure erupted towards the end of the day which saw the 30-share Sensex sink to 77,578.38, but still closed with gains of 239.37 points.
On the NSE, the Nifty50 also rebounded and rose 300 points to hit a high of 23,780.65. But it ended the day only 64.70 points higher at 23518.50.
“The Nifty rallied sharply as broad-based buying emerged in the market, after seven days of continuous fall. However, it could not sustain the gains and fell in the last hour, closing flat at around 23,519. Selling pressure overtook, following reports of escalating geopolitical tensions between Russia and Ukraine.,” said Siddhartha Khemka, head of research, wealth management at Motilal Oswal Financial Services.
The markets will be shut on Wednesday on account of the Maharashtra Assembly elections. Analysts said the outcome of the polls in Maharashtra could influence the way the markets move in the near term.
Mahindra & Mahindra was the biggest gainer in the Sensex pack, closing with a gain of 3.55 per cent at ₹2,948.10.
Other gainers included Tech Mahindra, HDFC Bank, Sun Pharmaceuticals and Tata Motors.
Reliance Industries bore the brunt of the selling pressure, falling 1.53 per cent to ₹1,241.20. State Bank of India, Bajaj Finserv, Maruti, Tata Steel and Bharti Airtel were among the laggards.
Provisional data from the bourses showed FII selling stocks worth ₹3,412 crore in the day’s trade, which was somewhat offset by the net purchases of domestic institutions that totalled ₹2,784 crore.
