Shaky Street: Sensex surges 1.1k points day after 2.2k-point crash

MUMBAI: A smart recovery in the US markets overnight, positive global cues and short covering in Tuesday's session aided an impressive comeback for the stock market after Monday's rout. At close, the sensex was up 1,089 points or 1.5% at 74,227 points while the Nifty was up 374 points or 1.7% at 22,536 points. On Monday, the sensex had lost 2,227 points, its sixth biggest single-day fall ever.

Tuesday's rise came on the back of reports that several countries have reached out to the US to negotiate trade terms and overcome impending hurdles to bilateral trade after Trump proposed steep new tariffs on April 2 on many of the US's trading partners.


"Following positive global cues, led by interest of many nations to enter into bilateral agreements with the US, the domestic market witnessed a recovery," said Vinod Nair of Geojit Investments. "In addition, this optimism stems from the fact that India's economy is driven mainly by local demand and comparatively lower reciprocal tariff. The ongoing trade negotiations with the US too has helped."

The day's gains added about Rs 7.3 lakh crore to investors' wealth with BSE's market capitalisation at Rs 396.6 lakh crore. The gains were also partly aided by strong Asian markets. In early trades, Nikkei in Japan was up more than 6% while Hang Seng in Hong Kong was up about 2%.

Although most domestic investors rejoiced at the day's gains, some market players were unsure if the rally was a genuine turnaround or just a blip. They pointed out that on Tuesday, FPIs were net sellers of stocks at Rs 4,994 crore, while domestic investors were net buyers at Rs 3,097 crore, BSE data showed. "Investors are advised not to read too much into this single-day recovery, as tariff-related developments are likely to keep volatility elevated," said Ajit Mishra of Religare Broking. On Wednesday, trading on Dalal Street is expected to be influenced largely by RBI's decision on interest rates.