Investors turn richer by Rs 19 lakh crore as Sensex adds over 5,000 points in 8 sessions

After hitting a seven-month low on March 7 and losing up to 16-odd percent gains from its record high, the market has consistently remained in control of bulls, thanks to positive global cues, easing commodity prices and declining volatility.

The first net buying by FIIs since February 11, pricing in most of the worst possible impact from the Ukraine-Russia conflict, and rate hike by Federal Reserve on expected lines also lifted sentiment.

Equity benchmark BSE Sensex added more than 5,000 points and the Nifty50 gained over 1,400 points in the last eight sessions in a row barring the March 15 trading.

On March 17, the Nifty50 jumped 327 points or 2 percent to 17,303, and the BSE Sensex climbed 1,139 points or 2 percent to nearly 58,000, following positive trend in Asian counterparts and driven partly by short-covering.

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Hong Kong's Hang Seng was the biggest gainer on Thursday, rising nearly 7 percent backed by tech and property stocks, while Japan's Nikkei jumped 3.5 percent. China's Shanghai Composite, Australia's ASX 200 and South Korea's Kospi gained more than 1 percent each, tracking gains at Wall Street overnight. Nasdaq Composite gained 3.8 percent, Dow Jones rose 1.5 percent and S&P 500 was up 2.2 percent, reacting to 25 bps rate hike by Federal Reserve and signalling six more rate hikes in 2022.

"The Fed raising rates by 25 bps was on lines of market expectations. The Fed's projections of another six hikes this year is hawkish and, therefore, the smart rally in US markets was a bit unexpected. The explanation is that the market was oversold and the consequent short-covering pushed the indices higher," says VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He said the market drew confidence from Fed chief Jerome Powell's statement that the American economy was strong and well-positioned to handle tighter monetary policy. "FPIs turning buyers after a long time and softness in crude supported the market," Vijaykumar said.

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As a result, the rally helped investors become wealthier by more than Rs 19 lakh crore in eight straight sessions as the BSE market capitalisation increased to Rs 260 lakh crore, up from Rs 241 lakh crore on March 7.

On Thursday itself, investors' wealth increased by Rs 4 lakh crore.

All the sectors, barring Metal, participated in the run with Bank, Auto, FMCG, IT, Realty being the prominent gainers from March 8.

Foreign institutional investors, on March 16, turned net buyers in Indian equities for the first time since February 11 as they bought Rs 312 crore worth of shares. But still, they are net sellers in current month to the tune of Rs 44,417 crore, in addition to Rs 1.88 lakh crore worth of selling in previous five straight months.

The volatility also declined sharply, falling near 21 levels on Thursday, from 34 mark on February 24 which gives more comfort to bulls that pushed the market higher.

Oil price, the major worrisome factor for India, also fell to $98 a barrel in previous session amid increasing in US crude stockpiles and hopes of progress in Russia-Ukraine peace talks, though on Thursday jumped to $101 a barrel on supply shortfall warning by International Energy Agency. Overall the prices have corrected from $139 a barrel seen earlier this month, which is quite positive.

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Reports indicated that there has been some signs of progress in peace talks between officials of Ukraine and Russia, but Russian forces continued bombing on cities in Ukraine, increasing causalities.

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