Positive global cues, value buying lift equity markets

Mumbai, Oct 3: Indian equity markets on Monday soared on the back of positive global cues, coupled with value buying and higher crude oil prices. The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) surged by 126.95 points or 1.47 per cent to 8,738.10 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,997.29 points, closed at 28,243.29 points — up 377.33 points or 1.35 per cent from the previous close at 27,865.96 points.

The Sensex touched a high of 28,273.02 points and a low of 27,919.89 points during the intra-day trade. The BSE market breadth was skewed in favour of the bulls — with 2,226 advances and 664 declines.

On Friday, the Indian equity markets closed flat as investors were seen reluctant to chase prices after tension between India and Pakistan escalated, and due to an outflow of foreign funds.

The barometer index had inched up by 38.43 points or 0.14 per cent, while the NSE Nifty margilly gained 19.90 points or 0.23 per cent.

“The Indian markets reversed in favour of the bulls after a short and sharp correction in the previous week,” said Nitasha Shankar, Senior Vice President for Research with YES Securities. “Further, the benchmark indices gained around 1.50 per cent led by a short covering rally. Broader markets outperformed the headline indices ending at the high point of the day.” Both the midcap and smallcap indices ended higher by three per cent each. Initially on Monday, the benchmark indices opened on a higher note in sync with their Asian peers. The equity markets gained on the back of a positive close of the US markets on last Friday and easing of cross-border tensions between India and Pakistan.

The market sentiment was given a fillip after a survey showed that India’s manufacturing momentum — measured by the Nikkei India Manufacturing Purchasing Mager’s Index (PMI) — has been sustained in September.

Besides, investors’ risk-taking appetite was enhanced on hopes that the Reserve Bank of India (RBI) might ease its monetary policy. The newly-constituted Monetary Policy Committee (MPC) headed by Reserve Bank of India Governor Urjit Patel began its first meeting on Monday. The committee will recommend the next move on key interest rates which will be announced on Tuesday.

Higher sales seen in the automobile sector in September due to healthy monsoons and positive effects of the seventh pay commission gave a positive momentum to the domestic markets.

In addition, short covering and value buying at lower levels, higher crude prices and inflow of foreign funds added momentum to the upward trajectory.

The Indian rupee strengthened by three paise to 66.59 against a US dollar from its previous close of 66.62 to a greenback. “The markets extended gains on the back of short covering from last week. Value buying and higher global crude oil prices also kept the sentiments buoyed,” And James, Chief Market Strategist at Geojit BNP Paribas Fincial Services, told IANS. According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, bank Nifty traded firm throughout the session due to short covering at lower levels.

“IT stocks traded with mixed sentiments and witnessed recovery in second half of the session,” Desai said.

“Banking, pharma and auto stocks traded with firm sentiments on buying support, while oil-gas, textile and aviation stocks also traded firm on buying support. FMCG, power and cement stocks traded with firm sentiments due to short covering at lower levels.” In terms of investments, provisiol data with exchanges showed that the foreign institutiol investors (FIIs) bought stocks worth Rs 34.22 crore, whereas the domestic institutiol investors (DIIs) purchased scrip worth Rs 198.02 crore.

Sector-wise, all the 19 sub-indices of the BSE witnessed healthy buying, led by automobile, capital goods and banking stocks.

The S&P BSE automobile index surged by 543.29 points, followed by the capital goods index, which rose by 354.57 points, and the banking index gained by 351.48 points.

Major Sensex gainers during Monday’s trade were: Maruti Suzuki, up 3.70 per cent at Rs 5,681.85; Hero MotoCorp, up 3.18 per cent at Rs 3,523; Adani Ports, up 3.00 per cent at Rs 264.45; Gail, up 2.86 per cent at Rs 384.75; and Power Grid, up 2.72 per cent at Rs 181.15.

Major Sensex losers were: Tata Consultancy Services (TCS), down 0.63 per cent at Rs 2,411.80, and Infosys, down 0.02 per cent at Rs 1,037.85. (IANS)