Bargain hunting propels markets; Sensex up 104 points

Mumbai, July 29 : Bargain hunting coupled with subsiding of US rate hike fears on Wednesday propelled Indian equity markets which closed in the green. After four consecutive sessions of losses which started from July 23, the barometer S&P 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gained over 100 points in the day’s trade. The Sensex lost over 1,040 points during the last four sessions. The main reason for the downfall emated from the recommendations made by the special investigative team (SIT) appointed by the Supreme Court on black money.

The SIT had recommended that the participatory note, or P-Note, route of overseas funds investing in Indian stocks be stringently regulated. Apart from P-Notes, worries over retrospective tax on capital gains, the continuing slide in Chinese markets and the proposed containment of the central bank’s powers to fix key rates had also subdued the markets.

On Wednesday, the wider 50-scrip Nifty of the tiol Stock Exchange (NSE) also closed in the positive territory. It was up 38 points or 0.46 percent at 8,375.05 points. The S&P BSE Sensex which opened at 27,540.46 points, closed at 27,563.43 points, up 104.20 points or 0.38 percent from the previous day’s close at 27,459.23 points.

The Sensex touched a high of 27,609.29 points and a low of 27,470.09 points in the intra-day trade. According to market alysts, Indian exchanges remained in the positive zone due to the consistent buying ahead of the July futures and options (F&O) expiry on Thursday.

Alysts pointed out that better-than-expected corporate results from the US and hopes that US Federal Reserve will postpone interest rate hike supported markets. “Recent slippage attracted bargain hunting. Announcement of quarterly results have also kept investors interested, and FOMC (Federal Open Market Committee) fears were pushed to the background,” And James, co-head, technical research desk, Geojit BNP Paribas, told IANS.

The FOMC meet is significant as it will give further clues as to when the rate-hike might take place in the US. With higher interest rates in the US, the FPIs (Foreign Portfolio Investors) are expected to be led away from emerging markets such as India. “The Chinese equities did recover some lost ground, but concerns over the health of its fincial market and economic prospects remained as recent economic data has been less encouraging,” James said.

The continuous slide in the Chinese markets in the last two months has eroded nearly 40 percent of the stock value and caused panic. More importantly, the ibility of the Chinese government, fund houses and brokerage firms to arrest the fall led to global sell-offs.

Gaurav Jain, director with Hem Securities, elaborated that the markets remained volatile throughout the day ahead of derivative contracts expiry. “Rebound in global commodities prices boosted sentiments. Investors stayed cautious ahead of FOMC meet outcome which is expected to come tonight,” Jain said.

Sector-wise, healthy buying was observed in capital goods, automobile, information technology (IT), healthcare and technology, entertainment and media (TECK) stocks. However, consumer durables, fast moving consumer goods (FMCG) and oil and gas sectors came under intense selling pressure.

The BSE capital goods index zoomed by 335.50 points, the automobile index rocketed by 257.45 points, IT index augmented by 160.27 points, healthcare index was higher by 84.52 points and the TECK index was up by 81.91 points. However, consumer durables index declined by 215.52 points, FMCG index receded by 63.96 points and oil and gas index decreased by 17.77 points.

Major Sensex gainers during Wednesday’s trade were: Infosys, up 2.04 percent at Rs.1,085.20; Maruti Suzuki, up 1.87 percent at Rs.4,273.95; Lupin, up 1.83 percent at Rs.1,638.75; BHEL, up 1.78 percent at Rs.283.20; and Larsen and Toubro (L&T), up 1.75 percent at Rs.1,789.65.

The major Sensex losers were: ITC, down 2.35 percent at Rs.303.95; State Bank of India (SBI), down 2.18 percent at Rs.253.70, Reliance Industries, down 1.44 percent at Rs.995.45, NTPC, down 1.17 percent at Rs.135.25; and Gail, down 1.08 percent at Rs.348.15.

Among the Asian markets, Japan’s Nikkei was down 0.13 percent. However, Chi’s Shanghai Composite Index gained by 3.47 percent and Hong Kong’s Hang Seng rose by 0.47 percent. In Europe, the London FTSE 100 index was higher by 0.47 percent, but the French CAC 40 was margilly down by 0.11 percent. Germany’s DAX Index, too, fell by 0.21 percent at the closing bell here. (IANS)