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    Closing Bell: Sensex surges 740 pts to 7-week high boosted by financial, auto, IT stocks; VIX eases 3%

    Closing Bell: Sensex surges 740 pts to 7-week high boosted by financial, auto, IT stocks; VIX eases 3%

    Closing Bell: Sensex surges 740 pts to 7-week high boosted by financial, auto, IT stocks; VIX eases 3%
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    By Sandeep Singh   IST (Updated)

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    The Sensex and the Nifty50 jumped more than one percent boosted by financial, auto and IT stocks. The 30-scrip gauge hit a seven-week closing high. Globally, optimism on progress in negotiations between Russia and Ukraine aided sentiment.

    Indian equity benchmarks extended gains to a third straight day on Wednesday, led by financial, auto and IT shares even as metal shares played spoilsport. Gains in heavyweights Reliance Industries and Infosys also pushed the headline indices higher. Globally, optimism on progress in negotiations between Russia and Ukraine aided sentiment.
    The 30-scrip Sensex index rose 740.3 points or 1.3 percent to end at 58,684 -- its highest close since February 10 - and the broader Nifty50 benchmark settled at 17,472.3 - its highest since February 15, up 147 points or 0.9 percent from its previous close.
    HDFC Life, the Bajaj twins, Tata Consumer, PowerGrid, Hero MotoCorp and Mahindra & Mahindra -- closing between 2.7 percent and 3.5 percent higher -- were among the top blue-chip gainers.
    On the other hand, ONGC, Hindalco, JSW Steel, ITC, Tata Steel, Coal India and Tech Mahindra -- declining between 1.8 percent and 5.4 percent -- were the worst hit among the 18 laggards in the Nifty50 pack.
    Reliance Industries, Infosys, ICICI Bank and the HDFC twins were the biggest contributors to the gains in both headline indices.
    The India VIX - known in market parlance as the fear index - finished the day down 3.3 percent at 20.6, coming below the 20 mark in intraday trade for a second time so far this month. Last month, Russia's move to invade Ukraine had sent the index leaping to a 20-month high of almost 34.
    Here are some key factors impacting the market now:
    • Geopolitical uncertainty:
    • Investors are assessing news updates about the Russia-Ukraine war closely. Ukrainian officials reported shelling around the capital Kyiv and Chernihiv despite Moscow's promise to scale down its military operations in these regions.
    • Crude oil: Benchmark crude oil rates rose after hitting two-week lows on Tuesday. Brent is still in three digits though off its recent peaks. On Wednesday, it was last up 2.1 percent at $110 a barrel, and WTI up 2.5 percent at $106.7 a barrel.
    • Interest rates: This month, the Fed announced a rate hike of 25 basis points as expected - it's first increase in more than three years. Fed Chairman Jerome Powell sounded confident about the strength of the US economy and its ability to handle tighter monetary policy.
    • Inflation: The more hawkish tone of central bankers comes at a time when rising prices of commodities - crude oil in particular - have stoked fears of stagflation. Businesses in India as well as around the globe are struggling against rising input costs.
    • FII outflows: March is set to be the sixth straight month of FII outflows for Dalal Street. So far this month, FIIs have net sold Indian shares worth Rs 47,727.5 crore, though DIIs have made net purchases to the tune of Rs 37,315.8 crore, provisional exchange data shows.
    • Concerns over economic recovery: Official data released last month showed India's economy expanded by a slowed-than-expected 5.4 percent in the October-December period. Economists in a CNBC-TV18 poll had pegged the quarterly GDP growth at 5.7 percent.
    • Valuations: Experts have time and again flagged expensive valuations of Indian equities.
    • Pandemic: A recent increase in COVID cases in China, triggering curbs in a major industrial belt in the country, has remained on investors' radar.
    • "High volatility prevailed in the global markets, but peace talks between Russia and Ukraine gave hopes of de-escalation of war, aiding confidence in the domestic market. Lower crude oil and commodity prices supported the market, as they will help corporates reduce their margin pressure," said Vinod Nair, Head of Research at Geojit Financial Services.
      The heavyweight BFSI pack strengthened, with the Nifty Bank and Nifty Financial Services indices rising 1.4 percent and two percent respectively.
      On the other hand, metal stocks took a beating amid a fall in commodity prices. The Nifty Metal was the top loser among NSE's sectoral gauges, dragged by Tata Steel and JSW Steel.
      Tata Consumer jumped after the company announced simplification of its structure.
      ONGC's offer for sale (OFS) hit the Street, wherein the government is selling up to 1.5 percent in the state-owned company. The stock took a beating as the floor price of the OFS was at a discount to its price in the spot market and as crude oil rates moved well below their recent highs.
      Broader markets also strengthened in line with the main gauges, with the Nifty Midcap 100 index rising 0.9 percent and its smallcap counterpart one percent.
      In the midcap and smallcap segments, Home First, Aavas Financiers, Vakrangee and Nesco -- rising around 8-11 percent -- were among the top gainers. On the flipside, Supreme Petro, Lemon Tree, Future Retail and Nilkamal -- declining 5-7 percent -- were among the top losers.
      Overall market breadth was in favour of the bulls, with an advance-decline ratio of almost 2:1 as 1,323 stocks rose and 747 fell on NSE.
      Global markets
      European shares began the day on a negative note despite positive cues from Asia, with the Stoxx 600 halting a three-day winning run driven by hopes of a breakthrough in Russia-Ukraine talks. The pan-European index was down 0.6 percent in early hours.
      S&P 500 futures were down 0.4 percent, suggesting a weak start ahead on Wall Street.
      Technical outlook
      Unless the Nifty50 crosses 17,500 on a closing basis, the index is expected to stay in a consolidation range of 17,000-17,500, said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.
      "If the index manages to cross 17,500 on a closing basis, the tables will turn in favour of the bulls. In that case, the Nifty can extend towards 18,000. The index is currently hovering around a make-or-break level from a short-term perspective," he said.
      Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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