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Expectations of share buy-back, global cues lift equities

Mumbai, Feb 20: Expectations of a share buy-back offer from a large IT major and a strong rupee lifted the Indian equities markets on Monday, even as caution prevailed ahead of derivatives expiry and outflow of foreign funds. Besides, the key indices closed with gains of over half a per cent each on the back of positive global cues and healthy buying support witnessed in the metal, IT and automobile stocks.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) rose by 57.50 points or 0.65 per cent to 8,879.20 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 28,481.91 points, closed at 28,661.58 points — up 192.83 points or 0.68 per cent from the previous close at 28,468.75 points. The Sensex touched a high of 28,696.53 points and a low of 28,419.27 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls — with 1,708 advances and 1,141 declines.

In terms of broader markets, the BSE mid-cap index rose by 0.68 per cent, whereas the small-cap index was up by 0.91 per cent. On Friday, the benchmark indices rose to new five-month closing highs on the back of fresh buying.

The NSE Nifty was up by 43.70 points or 0.50 per cent and closed at 8,821.70 points, and the BSE Sensex was up 167.48 points or 0.59 per cent at 28,468.75 points.

Market observers pointed out that buy-back in the IT space and expectation of turn-around in the metal-infrastructure space kept the benchmark indices north-bound. “A late rally in software major TCS (Tata Consultancy Services) stocks, which rose by 3.92 per cent to Rs 2,505.2, helped pull the market higher,” Vijay Singhania, founder and Director of brokerage firm Trade Smart Online, told IANS.

“Global cues resulted in metal stocks gaining during the day, with the metal index rising 2.07 per cent.”

On the contrary, investors are expected to be cautious ahead of US Fed’s FOMC (Federal Open Market Committee) and the minutes of the Reserve Bank of India’s Monetary Policy Committee (MPC).

“The US FOMC and the RBI minutes are expected to throw no surprises, but will keep markets guarded,” said And James, Chief Market Strategist at Geojit BNP Paribas Fincial Services.

“Trading dymics are bound to be influenced by holiday and (Mumbai) municipal elections, especially with derivatives expiry also packed in.”

The RBI minutes of its last monetary policy review are expected to be released on Tuesday, while the derivatives expiry will take place on Thursday, February 23. On the currency front, the Indian rupee strengthened by eight paise to 66.93 against a US dollar from its previous close of 67.01 to a greenback.

In terms of investments, the provisiol data with exchanges showed that foreign institutiol investors (FIIs) sold stocks worth Rs 433.38 crore, whereas the domestic institutiol investors (DIIs) purchased scrip worth Rs 827.90 crore.

Commenting on the sector-specific movement, Dhruv Desai, Director and Chief Operating Officer of Tradebulls, said: “IT sector stocks faced resistance at higher levels due to profit booking and traded with mixed sentiments.”

“Banking, pharma, auto, media-entertainment and FMCG stocks also faced profit booking at higher levels and traded with mixed sentiments, whereas oil-gas, textile, aviation, cement and power stocks traded with healthy buying support.”

Sector-wise, all the sub-indices of the BSE ended in the green, except for the FMCG index, which fell by 5.03 points.

The S&P BSE metal index augmented by 236.70 points, followed by the IT index, which surged by 166.05 points, and the automobile index, which increased by 140.01 points. Major Sensex gainers on Monday were: TCS, up 4.08 per cent at Rs 2,506.50; Tata Steel, up 4.01 per cent at Rs 486.70; Gail, up 2.80 per cent at Rs 524.00; HDFC Bank, up 2.18 per cent at Rs 1,407.20; and Power Grid, up 1.95 per cent at Rs 206.40. (IANS)

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Ankur Kalita