Sensex gained 6.5 per cent or 3,154 points;sharpest May-month rally in seven years

The S&P BSE Sensex gained 6.5 per cent, or 3,154 points in May on optimism on economic rebound and progress in pandemic fight is expected to evince buying interest across major sectors. In the process, the Sensex witnessed its sharpest May month gain during the past seven years. Earlier in May 2014, the Sensex had rallied 8 per cent during the month. The benchmark index also set to post its biggest gain in percentage terms in the past five months. In December 2020, it had gained 8 per cent after an 11.4 per cent surge recorded in November.

Among the index stocks, State Bank of India (SBI) was the top gainer, surging 20 per cent during the month, after reporting another strong quarterly performance in March quarter (Q4FY21). ICICI Bank, IndusInd Bank, HDFC Bank and Bajaj Finserv from the financial sector outperformed the Sensex and gained over 7 per cent during the month.

Asian Paints rallied 17 per cent on expectation of strong volume growth to sustain, riding the potential demand shift from the unorganised segment. Maruti Suzuki India, Bajaj Auto, Larsen & Toubro, Nestle India and Reliance Industries were up between 8 per cent and 10 per cent.

Global cues, too, were positive as focus turned to a multi-trillion dollar spending boost by the Biden administration. Even hawkish comments from the Bank of England official boosted market sentiment. Back home, India recorded its lowest daily count of new Covid-19 cases in the last one and half months.

Analysts at Morgan Stanley believe that India's second wave may have peaked, and the market is now looking at how quickly the wave descends in addition to how much the vaccination can be ramped up. In their most aggressive target, they see the Sensex at 61,000 levels by December 2021.