Positive domestic cues, value buying buoy equity markets

MUMBAI, May 12 : Positive domestic cues, including parliamentary approval for a key economic legislation, expectations of healthy quarterly results and value buying buoyed the Indian equity markets on Thursday.

This led to the key indices of the Indian equity markets closing the day’s trade with appreciable gains.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) edged up by 51.55 points, or 0.66 per cent, at 7,900.40 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,684.60 points, closed at 25,790.22 points — up 193.20 points or 0.75 per cent from the previous close at 25,597.02 points.

The Sensex touched a high of 25,827.03 points and a low of 25,620.27 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls - with 1,576 advances and 1,008 declines.

Both the key indices had ended in the red during the previous trade session on Wednesday, as an amended tax treaty between India and Mauritius spooked investors at the prospects of a massive outflow of foreign capital from the equity markets.

The barometer index had edged lower by 175.51 points or 0.68 per cent, while the NSE Nifty fell by 38.95 points or 0.49 per cent.

Initially, the equity markets opened on a positive note, a day after parliament passed key economic legislation.

The Rajya Sabha on Wednesday had passed the Insolvency and Bankruptcy Code 2016, which is seen as a key reform that will encourage entrepreneurship.

Besides, value buying was triggered due to attractive prices from Wednesday’s correction.

In addition, recovery in European markets pushed key domestic indices higher.

However, gains were capped as investors were seen cautious ahead of the release of key domestic macro-economic data such as CPI (Consumer Price Index) and IIP (Index of Industrial Production).

Investors fear that retail inflation might accelerate to five percent in April. This can reduce future rate cut chances by the country’s apex bank.

“Yesterday’s correction made prices attractive which triggered value buying and supported the markets’ upward movement,” And James, chief market strategist, Geojit BNP Paribas Fincial Services, told IANS.

“Investors’ confidence was restored after the Rajya Sabha passed key economic legislation.”

According to Vaibhav Agarwal, vice president and research head at Angel Broking, bank stocks surged on the back of the passage of the Insolvency Bill.

“Going forward, India’s industrial data and import data will be a key trigger for the market,” Agarwal said.

Both the foreign institutiol investors (FIIs) and domestic institutiol investors (DIIs) were net buyers during the day’s trade.

Data with stock exchanges showed that the FIIs bought stocks worth Rs 24.14 crore, while the DIIs purchased scrip worth Rs 258.35 crore.

Sector-wise, except for the capital goods index, all the sub-indices made healthy gains during the day’s trade.

The S&P BSE banking index surged by 181.21 points, followed by the consumer durables index, which rose by 166.26 points; and the IT (information technology) index gained by 125.45 points.

Conversely, the S&P BSE capital goods index fell by 5.69 points.

Major Sensex gainers during Thursday’s trade were Dr.Reddy’s Lab, up 3.65 per cent at Rs 2,973.85; ICICI Bank, up 3.46 per cent at Rs 231.85; Asian Paints, up 2.13 per cent at Rs 926.75; Tata Consultancy Services (TCS), up 1.96 per cent at Rs 2,567.05; and State Bank of India (SBI), up 1.87 per cent at Rs.188.40.

Major Sensex losers were Axis Bank, down 1.19 per cent at Rs 492.45; Hindustan Unilever (HUL), down 1.11 per cent at Rs 853.15; Mahindra and Mahindra (M&M), down 1.07 per cent at Rs 1,331.80; HDFC, down 0.69 per cent at Rs.1,195.35; and Maruti Suzuki, down 0.69 per cent at Rs 3,862.95.(IANS)