A strong wave of buying engulfed the domestic market, surprising many, as concerns over inflation, aggressive rate hikes and geopolitical tensions persisted.
Market participants did not have much clue what worked for the market today when the data showed India's wholesale price-based inflation surged to a record high of 15.08 percent in April from 14.5 percent in March.
There was some relief on the front of global cues as reports suggested that lockdowns in China may ease soon which can boost the prospects of global economic growth.
Sensex vaulted 1426 points in intraday trade and settled with a gain of 1345 points, or 2.54 percent, at 54,318.47 with all components in the green. Nifty ended the day at 16,259.30, up 417 points or 2.63 percent.
"After a long gap, the market has witnessed a strong resilience supported by heavyweights and broader markets. The market was trading at oversold territory and was inspired by optimism in the Asian markets led by Chinese technology stocks, in hopes of easing regulatory crackdown and declining covid cases," Vinod Nair, Head of Research at Geojit Financial Services pointed out.
Shares of Tata Steel, Reliance Industries and ITC ended as the top gainers in the Sensex kitty, rising up to 8 percent.
BSE Midcap index rose 2.51 percent while the smallcap index climbed 2.78 percent. The overall market-capitalisation of BSE-listed firms rose to ₹255.6 lakh crore from ₹243.5 lakh crore on May 16, making investors richer by ₹12 lakh crore in a day.
All sectoral indices ended in the green with BSE Metal surging as much as 8 percent. BSE Basic Materials and Energy indices rose over 4 percent each.
"Markets witnessed a sharp relief rally as the recent slump had put key indices in an oversold territory. Traders covered their short positions in several beaten-down stocks that propelled key benchmarks today. However, the rally could be short-lived as the unabated FII selling coupled with concerns of further rate hikes to tame inflation may fuel volatility," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
Shares of LIC ended at ₹875.45, down 9.65 percent from its IPO price of ₹969.
"The much-watched LIC’s IPO showed a subdued listing. However, we believe that LIC is a decent investment opportunity in the short to medium-term; considering its deep discount valuation, strong market presence, improvement in future profitability due to the changes in surplus distribution norms and strong sector growth outlook," said Nair.
The rupee ended 26 paise higher at 77.57 per dollar on May 17 while brent crude traded near $115 a barrel mark.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies and not of MintGenie.