Benchmark indices extended their gains for the second consecutive session — surging over 2 per cent on value buying amid reports of Ukraine staying away from Nato.
While the 30-share Sensex rose 1223.24 points, or 2.29 per cent, to close at 56647.33, the broader Nifty 50 settled with gains of 331.90 points at 16345.35.
However, there are no signs of an end to the war between Russia and Ukraine, although markets reacted positively to Ukraine President Volodymyr Zelensky’s statement that the country was no longer interested to take Nato membership — which was a trigger for the war.
Crude prices also softened with Brent trading almost 4 per cent lower at around $124.50 a barrel.
Investors believe the US Federal Reserve is unlikely to go in for aggressive interest rate hikes as this will hurt global economic growth.
Analysts said the results of the elections to five states to be announced on Thursday will influence sentiments. They said the mood is upbeat as the exit polls have predicted a BJP victory in the key state of Uttar Pradesh.
Fast start
The Sensex opened in the green at 53793.99 and zoomed 1469.64 points, or 2.75 per cent, to 54893.73. It finally settled higher by 2.29 per cent, notching up the biggest single-day gain since February 25.
Asian Paints led the pack, rising 5.56 per cent with the falling crude price. The paint stock was followed by Reliance Industries, Bajaj Finance, Mahindra & Mahindra and IndusInd Bank, which rose by up to 4.18 per cent.
“The bulls finally held the upper hand on Wednesday. Domestic investors who have reposed faith in government policies amidst the turmoil and volatility would be keenly watching the impact of rising oil and commodity prices on inflation and corporate earnings,’’ S. Ranganathan, head of research at LKP Securities, said.
Analysts warned petrol and diesel prices were likely to rise after a gap of more than four months, with the state elections coming to an end. This could force the RBI to raise its rates earlier than planned.
Rising commodity prices could hurt margins of various sectors thereby moderating the earnings of corporate India.
The rupee posted strong gains against the dollar following the rally in stocks. The domestic currency ended at 76.56 to the greenback — a rise of almost 44 paise.
Equity MFs inflow
Equity mutual funds attracted net inflows for the twelfth-month running at Rs 19,705 crore in February, amid a highly volatile market environment and continued FPI selling.
They witnessed a net inflow of Rs 14,888 crore in January and Rs 25,077 crore in December, data from the Association of Mutual Funds in India (Amfi) showed on Wednesday.
Equity schemes have been witnessing a net inflow since March 2021. Prior to this, such schemes had consistently witnessed outflows for eight months from July 2020 to February 2021, losing Rs 46,791 crore.
