Positive global cues, value buying buoy equity markets

Mumbai, June 17: Positive global cues, along with value buying and a strong rupee, buoyed the Indian equity markets on Friday. Consequently, the key indices closed in the green before which they had slipped into the negative territory due to selling pressure. Nonetheless, a relief rally in Europe, coupled with domestic short covering helped the benchmark indices to pare their losses in the last half an hour of the day’s trade.

The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) edged up by 29.45 points or 0.36 per cent, at 8,170.20 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,653.85 points, closed at 26,625.91 points — up 100.45 points or 0.38 per cent from the previous close at 26,525.46 points. The Sensex touched a high of 26,730.55 points and a low of 26,538.51 points during the intra-day trade.

0In contrast, the BSE market breadth was tilted in favour of the bears — with 1,308 declines and 1,268 advances. Both the key Indian indices had ended lower on Thursday, following negative global cues and profit booking. The barometer index had plunged by 200.88 points or 0.75 per cent, while the NSE Nifty had lost 65.85 points or 0.80 per cent.

Initially the markets opened on a positive note, in sync with their Asian peers and higher closing of the US stocks on Thursday.

Even healthy macro-economic data on current account deficit (CAD) lent support to the equity markets’ upward movement. The CAD rrowed sharply to $0.3 billion or 0.1 percent of the GDP in the fourth quarter of 2015-16.

Besides, higher global crude oil prices, value buying and short covering supported prices. In addition, an appreciation in rupee’s value restored investors’ risk taking appetite. The Indian rupee strengthened by 13 paise during the day’s trade. It closed at 67.08-09 against a US dollar from its previous close of 67.21-22 to a greenback.

Furthermore, recent government decisions on civil aviation, banking sector, debt recast gave a positive fillip to sentiments. However, major upcoming global event risks such as referendum in Britain on whether or not to stay as a part of the European Union (EU), F&O (futures and options) expiry and the US Federal Reserve Chairwoman Janet Yellen’s testimony to the US Congress panicked investors and capped gains. Further, investors were seen cautious after reports emerged that monsoon rains so far have been below average.

“Recovery in the global markets after succesive days of losses, prompted a positive opening of the key India based equity indices,” And James, Chief Market Strategist, Geojit BNP Paribas Fincial Services, said. “Relatively strong rupee and higher crude oil prices also aided the equity markets to remain in the positive territory.” According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty witnessed selling pressure in the second half of the session mainly due to profit booking at higher levels.

“Sugar stocks witnessed selling pressure after imposition of export duty by government and profit booking at higher levels,” Desai said. “IT and banking sector stocks traded lower on lack of fresh buying sentiments. However, downside in USD/INR futures prices limited the Nifty’s fall.”

In terms of investments, the foreign institutiol investors (FIIs) were net buyers during the day’s trade, while the domestic institutiol investors (DIIs) turned net sellers. Data with stock exchanges showed that the FIIs purchased stocks worth Rs 31.96 crore, whereas DIIs divested scrip worth Rs 26.21 crore.

Sector-wise, healthy buying was witnessed in automobile, consumer durables and FMCG (fast moving consumer goods) stocks, whereas scrip of healthcare, capital goods, and oil and gas came under heavy selling pressure.

The S&P BSE automobile index surged by 106.29 points, followed by the consumer durables index, which rose by 67.07 points; and the FMCG index gained 59.46 points. On the other hand, the S&P BSE healthcare index plunged by 117.31 points, followed by the capital goods index, which declined by 65.16 points, and the oil and gas index dipped by 9.44 points.

Major Sensex gainers during Friday’s trade were Bharti Airtel, up 2.73 per cent at Rs 355.70; HDFC, up 2.21 per cent at Rs 1,227.80; Tata Motors, up 2.03 per cent at Rs 463.20; Coal India, up 2.00 per cent at Rs 313.35; and Tata Consultancy Services (TCS), up 1.81 per cent at Rs 2,603.50.

Major Sensex losers during the day’s trade were Sun Pharmaceuticals, down 1.45 per cent at Rs 742.80; Tata Steel, down 1.38 per cent at Rs 325.50; Dr.Reddy’s Lab, down 1.36 per cent at Rs 3,005.40; State Bank of India (SBI), down 1.07 per cent at Rs 213.40; and Larsen and Toubro (L&T), down 0.91 per cent at Rs 1,478.20. (IANS)