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Oil Prices, Short Covering Buoy Equity Markets

Oil Prices, Short Covering Buoy Equity Markets

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  9 Oct 2018 6:11 AM GMT

Mumbai: Value buying along with short-covering and a slight decline in global crude oil prices buoyed the key domestic equity indices on Monday after three consecutive sessions of losses. In addition, expectations of a positive set of corporate earnings during the upcoming second quarter result season aided in the upward trajectory.

Sector-wise, healthy buying was witnessed in oil and gas, banking and auto counters. The recovery in oil and gas stocks came after the Minister for Petroleum and Natural Gas Dharmendra Pradhan told reporters that Indian companies will continue to buy Iranian oil beyond November despite US sanctions. Further, he categorically said that fuel prices will not be deregulated. The sector had come under heavy selling pressure last week post the excise duty and fuel price cut.

Index-wise, the Nifty50 of the National Stock Exchange, closed at 10,348.05 points up 31.60 points or 0.31 percent from its previous close.

The benchmark S&P BSE Sensex which opened at 34,412.36 points closed at 34,474.38 points, up 97.39 points or 0.28 percent from its previous close. The Sensex touched an intra-day high of 34,636.43 points and a low of 33,974.66 points during the intra-day trade.

However, in terms of broader markets, the S&P BSE Mid-cap index declined by 1.99 percent, while the S&P BSE Small-cap index slipped by 2.01 percent, from their previous close. “Stock markets in India traded under the radar for most of the day only to witness a sharp recovery in the last thirty minutes of trade,” said Abhijeet Dey, Senior Fund Manager-Equities, BNP Paribas Mutual Fund. “The recovery was led by buying an interest in select banking, energy and automobile names.”

According to Deepak Jasani, Head of Retail Research at HDFC Securities: “Technically, while the Nifty remains in a downtrend, we remain open to pullback rallies that could push the Nifty higher in the near term.” “Immediate supports are now at 10,198 points, while further upside rallies could find resistance at 10,398 points.”

On the currency front, the Indian rupee closed at 74.07 (74.0650) per US dollar — fresh closing low — 30 paise weaker than its previous close of 73.77.

Investment-wise, provisional data with exchanges showed that foreign institutional investors sold stocks worth Rs 1,805.07 crore and domestic institutional investors bought stocks worth Rs 1,973.97 crore. (IANS)

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