MUMBAI: In volatile trades on Monday, the sensex tanked nearly 700 points in early trades and then reversed all the losses by mid-session on growing optimism about an India-US trade deal. The index finally closed the session up 302 points, at 83,878 points, its first session of gains after five consecutive sessions of losses during which it had lost nearly 2,200 points (2.5%).The early slide was on the back of news that the US govt’s justice dept had opened a criminal probe against the US central bank chairman Jerome Powell. The news had the effect of putting the global financial markets in turmoil as such a move could push up interest rates globally.
The global uncertainty also pushed up haven assets higher with both gold and silver prices hitting new highs in the domestic as well as international markets.However, during the mid-session, investor sentiment improved after the US ambassador in India said that an India-US trade deal was nearing closure, lifting the index along with it. At close of Monday’s trading, investors were richer by about Rs 1 lakh crore with BSE’s market cap now at Rs 468.7 lakh crore.According to Vinod Nair, Head of Research, Geojit Investments, the domestic market rebounded from the day’s lows on Monday as investor sentiment lifted following favourable remarks on trade deals by the US Ambassador ahead of the next round of negotiations. This positive undertone provided a lift to overall market sentiment, Nair wrote in a note.The global uncertainty pushed up precious metal prices. On Comex in New York, gold prices broke above the $4,600/ounce (Oz) mark while on the MCX the Feb futures contracts were traded above the Rs 1.4 lakh/ kg mark. Silver prices on Comex went above the $85/Oz mark while on the MCX, the price of Feb futures contracts traded above the Rs 2.69 lakh/kg mark.The dollar also showed weakness against other major currencies, mainly on the back of the news about US Fed chief ’s legal troubles and the chance of an US intervention in Iran. As a result, the dollar index, a measure of relative strength of the greenback against a basket of major currencies, slid about 0.3%.In the interbank forex market in India, the rupee marginally strengthened against the dollar and closed at 90.16, from 90.22 on Friday.
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