Bargain hunting lifts Indian equities

Mumbai, Dec 13: Bargain hunting, along with positive Asian and European indices, lifted the Indian equities markets on Tuesday.

The two key indices opened margilly higher but hovered on a flat note for most part of the session, as investors were seen reluctant to chase prices given the upcoming monetary policy review in the US. However, healthy buying support from lower levels aided the key indices to make appreciable gains and end more than half a per cent higher.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) edged up by 51 points or 0.62 per cent to 8,221.80 points. The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 26,607.65 points, closed at 26,697.82 points — up 182.58 points or 0.69 per cent from the previous close at 26,515.24 points.

The Sensex touched a high of 26,724.97 points and a low of 26,494.23 points during the intra-day trade. In contrast, the BSE market breadth was margilly tilted in favour of the bears — with 1,304 declines and 1,281 advances.

On Monday, the equity markets had slipped on the back of profit booking and negative domestic cues. The barometer index was down 231.94 points or 0.87 per cent, while the NSE Nifty slipped by 90.95 points or 1.10 per cent.

“Markets bounced back smartly on Tuesday after the sell-off seen on Monday,” Deepak Jasani, head of retail research, HDFC securities, told IANS. “The Nifty opened on a shaky note and traded in a range in the morning session. Buying, however, soon emerged in the afternoon session on the back of positive Asian and European markets and helped to push the indices higher.”

Nevertheless, caution prevailed ahead of upcoming global economic events risks, such as the monetary policy review in the US and Britain, and the announcement of domestic inflation data. Besides, rupee depreciation, a pull-back in oil prices and an outflow of foreign funds spooked investors. The Indian rupee depreciated by 12 paise to close at 67.54 against a US dollar from its previous close of 67.42 to a greenback on Friday.

“Market participants are anxiously awaiting for the outcome of the US Federal Reserve’s meeting that begins later in the day, while crude oil prices pulled back after their surge to 18-month highs,” SMC Global Securities said in a commentary to IANS. “US Fed is widely expected to hike interest rates for the first time in 2016 at a two-day meeting.”

The rate setting meeting of the US Federal Open Market Committee (FOMC) is slated to be held on Wednesday, when it is widely expected to announce a 25 basis points (BPS) interest rate hike. A hike can potentially lead foreign portfolio investors (FPI) away from emerging markets such as India, and dent the business margins of corporate sector, as access to capital from the US will become more expensive.

“Besides, the US Fed meeting, market participants also waited for the November CPI (Consumer Price Index) data, which is scheduled to release today and WPI (Wholesale Price Index) inflation, which would be released tomorrow,” the stock brokerage firm added. In terms of investments, provisiol data with exchanges showed that the foreign institutiol investors (FIIs) sold stocks worth Rs 2,181.03 crore, while the domestic institutiol investors (DIIs) purchased scrip worth Rs 178.92 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, IT and banking stocks traded with volatile sentiments and witnessed good recovery in the second half of the session. “Pharma, auto, textile, aviation and media-entertainment stocks traded with mixed sentiments, whereas oil-gas and FMCG stocks traded with firm sentiments due to buying support,” Desai said.

“USD/INR futures prices traded with sideways sentiments which didn’t provide clear direction to the Indian equity markets price movement.” Sector-wise, the S&P BSE automobile index surged by 196.44 points, followed by the banking index, which gained 101.79 points, and the oil and gas index, which rose by 96.69 points.

On the other hand, the S&P BSE metal index receded by 108.38 points, the basic materials index fell by 26.02 points, and the realty index was lower by 14.23 points. Major Sensex gainers on Tuesday were: Tata Motors, up 3.48 per cent at Rs 470.35; Adani Ports, up 2.35 per cent at Rs 288; Wipro, up 1.86 per cent at Rs 462.65; Axis Bank, up 1.74 per cent at Rs 452.35; and Infosys, up 1.28 per cent at Rs 990.05.

Major Sensex losers were: Gail, down 1.34 per cent at Rs 423; Tata Steel, down 0.79 per cent at Rs 420.65; Lupin, down 0.71 per cent at Rs 1,492.10; Hindustan Unilever (HUL), down 0.41 per cent at Rs 829.75; and NTPC, down 0.33 per cent at Rs 164.90.(IANS)