Markets jump to a four-month high on surge in oil & gas stocks

Mumbai: The stock market jumped 1.5 per cent on Friday to a four-month high in a late surge led by oil and gas stocks on news that global energy giants have evinced interest in buying a majority stake in Bharat Petroleum Corp under the government’s privatisation programme. The Nifty closed above the 200-day moving average — a key hurdle for the index — of around 10,870, opening the gates for another 2-4 per cent rally in the near term.

The Nifty gained 161.75 points to close at 10,901.70. The Sensex rose 548.46 points to close at 37,020.14. Both indices closed at the highest level since March 6.

“Nifty has crossed the 200 DMA and the momentum is strong despite valuations being expensive,” said AK Prabhakar, head-research at IDBI Capital. “Investors should stay put as long as 10,500 is not broken.” When an index or a stock trades above the 200-DMA, it is said to be in a long-term uptrend and vice versa.

The market, which opened firm on Friday, was on the way to closing the session with modest gains. But, squaring up of bearish bets in the last hour of trade helped both indices end the week with 1.2 per cent gains. BPCL soared 12.4 per cent, ONGC gained 5.8 per cent and GAIL advanced 4.1 per cent. Reliance Industries jumped 3.9 per cent.

Global markets have recovered majority of the losses on account of the gigantic stimulus measures by central banks in developed economies aimed at easing the negative impact of Covid-19 on their economies. The Nifty has gained 45 per cent from the four-year low of 7,511 on March 23 though the outlook for the economy and companies remain grim with infections showing no signs of easing.