Equity Markets Gained 45% From March Lows: What Led To The 1.5% Rally On Friday?

Even as worldwide equity markets showcased a mixed performance on Friday, Indian equities managed to notch the longest weekly gains in a year. And after the Friday's gains to the tune of 1.5% on both the Nifty and Sensex, there is a recovery of a huge 45% from March lows due to market rout as a result of coronavirus pandemic.

Equity Markets Gained 45% From March Lows: What Led To The 1.5% Rally On Friday?

What Fuelled The Rally?

1. Hopes of early vaccine for Covid 19:

"Hopes of an early launch of Covid 19 vaccine kept global market sentiments positive. Better-than-expected 1QFY21 IT sector results, led by Infosys, buoyed investor sentiment. FPIs bought equities worth US$99 mn over the past five trading sessions while DIIs sold US$568 mn worth of equities in the same period."

2. Gains in Heavyweight:

All of the heavyweight stocks in Friday's session after severe bouts of volatility on the F&O expiry day ended higher including the likes of RIL, HDFC twins, HUL and ICICI Bank.

3. Divestment In PSU Stocks is another positive:

Stake sale by the government in public sector undertaking is also aiding the rally, with BPCL jumping up to 12% in trade as the centre plans to divest its entire stake in the company with no public company bidding for the stake in BPCL. Also, there has been news that global giants have been expressing for their interest in the company, which is also seen to fuel the rally.

Not just, BPCL, but other oil retailing companies including IOC and HPCL saw an uptick in stock price movement. ONGC gained up to 6%.

 

4. HCL, Britannia Q1 Results also came in better, so earning specific move witnessed

The IT major announced a good set of numbers for the quarter ended June shrugging off any wide impact due to the pandemic and thus with results far better than expected corporate including the likes of Brittannia have posted good numbers. .

 

 

Banking & Financials Also Upbeat

Towards the end of the session, banking stock primarily from the PSB space gained ground with Nifty PSU Bank up 1.83 per cent. Also financial index gained as much as 1.7%."Markets gained strength towards the end of the session, led by Financials and Energy stocks. Global markets were lacklustre as a EU summit to discuss a post-pandemic recovery fund is underway. The markets globally are banking on continued liquidity to ensure that the recent momentum seen in the markets does not stall. Indian stocks are seeing earnings specific moves while the ever present possibility of another lockdown has done little to affect the sentiment", said Vinod Nair, Head of Research at Geojit Financial Services.

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