Global and local cues buoy equity markets

Mumbai, June 29: Positive global cues, along with clearances for major economic policy decisions and a firm rupee, buoyed the Indian equity markets on Wednesday. Consequently, the key indices closed the day’s trade with appreciable gains, as healthy buying was witnessed in the automobile, information technology (IT) and consumer durables sectors. The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) gained by 76.15 points or 0.94 per cent, at 8,204 points.

Similarly, the barometer 30-scrip sensitive index (Sensex) of the BSE edged up during the day’s trade. It opened at 26,627.15 points, ended at 26,740.39 points — up 215.84 points or 0.81 per cent from the previous close at 26,524.55 points. The Sensex touched a high of 26,776.17 points and a low of 26,606.31 points during the intra-day trade.

The BSE market breadth was skewed in favour of the bulls — with 1,837 advances and 767 declines. On Tuesday, the key indices ended in the green due to global cues and a recovery of investors sentiments after Britain decided to leave the EU (Brexit). The barometer index surged by 121.59 points or 0.46 per cent, while the Nifty was up 33.15 points or 0.41 per cent.

Initially on Wednesday, the key indices opened on a flat-to-positive note, a day after healthy gains were made in the US and European markets, and a positive start of the Asian exchanges.

Global investors were hopeful that intertiol central banks might go in for major stimulus measures to protect growth as a result of Brexit.

Further, higher global crude oil prices and a firm rupee enhanced investors’ risk-taking appetite.

The global crude oil prices rose after the latest report by the American Petroleum Institute (API) showed a decline in US inventories.

The Indian rupee, too, appreciated. It strengthened by 26 paise to 67.68-69 against a US dollar from its previous close of 67.95 to a greenback.

Besides, government’s latest decision to accept the Seventh Pay Commission’s recommendations supported prices at the lower levels. It also gave a boost to consumer durables and non-durables sector stocks.

In addition, increased chances of the GST (Goods and Services Tax) bill getting passed in the upcoming monsoon session of the parliament lifted prices. The government on Wednesday said that GST will be at top of its agenda during the upcoming session.

However, gains were capped as investors turned cautious ahead of the F&O (futures and options) expiry. Even the healthy US macro-economic data made investors nervous on the possibility of an early onset to the next round of the US Federal Reserve’s rate hike cycle.

Earlier, the US FOMC (Federal Open Market Committee) had decided to maintain its key lending rates. The US Fed siglled its intention to limit the times it might increase key lending rates due to a weak domestic jobs market.

A hike in the US interest rates can potentially lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

“Positive global markets, rising crude oil prices and a firm rupee aided markets to make early gains. In addition, cabinet clearances for the new mining policy, seventh pay commission and increased chances of GST bill getting passed in the monsoon session restored investors risk taking appetite,” And James, Chief Market Strategist at Geojit BNP Paribas Fincial Services, told IANS.

“However, the upcoming F&O expiry and risk of early onset of rate hikes in the US after the release of healthy macro-economic data capped gains.”

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, positive start to the European markets supported the firm domestic sentiments in second half of the session.

“However, recovery from lower levels in USD/INR future prices limited the upside in Nifty,” Desai told IANS.

“Auto and textile stocks traded firm on buying sentiments due to acceptance of the seventh pay commission.”

In terms of investments, the provisiol data with exchanges showed that the foreign institutiol investors (FIIs) purchased stocks worth Rs 102.91 crore, and the domestic institutiol investors (DIIs) divested scrip worth Rs 20.19 crore.

Sector-wise, the S&P BSE telecom index augmented by 289.73, followed by the IT index, which rose by 153.16 points; and the consumer durables index gained by 149.89.

On the other hand, the FMCG index slipped by 11.99 points.

Major Sensex gainers during Wednesday’s trade were Hero MotoCorp, up 3.95 per cent at Rs 3,145; Power Grid Corporation, up 2.60 per cent at Rs 159.55; NTPC, up 2.36 per cent at Rs 151.60; Wipro, up 2.21 per cent at Rs 554.40; and GAIL, up 1.55 per cent at Rs 383.75. Major Sensex losers were Lupin, down 0.67 per cent at Rs 1,532.95; ITC, down 0.58 per cent at Rs 366.20; Coal India, down 0.54 per cent at Rs 311.45; Hindustan Unilever (HUL), down 0.53 per cent at Rs 883.05; and Bharti Airtel, down 0.18 per cent at Rs 356.65. (IANS)