Auto stocks lead Sensex gain of 300 points

Auto stocks including M&M and Tata Motors led the 300-point gain in the Sensex on Tuesday.

M&M was up more than 3 per cent while Tata Motors and Maruti Suzuki were up more than 1 per cent.

Sensex was trading at 74,991 points, up by 320 points.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said this bull market is remaining resilient despite headwinds, and is slowly gathering momentum despite high valuations. A significant feature of the ongoing bull run is that the FIIs are consistently being outsmarted by the DIIs and retail investors.

“Every time the US bond yields go up, particularly when the 10-year yield rises above 4.5 per cent, the FIIs have been selling but the DII plus retail buying has been completely overwhelming the FII selling, forcing the FIIs to buy the same stocks they sold earlier at higher prices later,” he said.

Also, the short covering by FIIs have contributed substantially to the recent surge in the market. Despite the big FII selling this month, Nifty is up by 700 points from the April 18th lows. The takeaway from this trend is that the bulls are calling the shots in this market and, therefore, every dip will be bought, he said.

A significant development in the market on Monday was the huge delivery volume in banking stocks like ICICI, HDFC, Axis, SBI and Kotak Mahindra. This segment will remain resilient and may appreciate further, he added.