Positive global markets, short covering lift equity markets

Mumbai, Nov 10: Positive global indices, coupled with value buying and short covering, lifted the Indian equity markets on Thursday — a day after global and domestic cues had heavily dented investors’ buying sentiments. Both the key indices closed with gains of around one per cent each, even as a selling spree was witnessed in the last session of the day’s trade. The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) surged by 93.75 points or 1.11 per cent, to 8,525.75 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,605.05 points, closed at 27,517.68 points — up 265.15 points or 0.97 per cent, from its previous close at 27,252.53 points. The Sensex touched a high of 27,743.46 points and a low of 27,457.05 points during the intra-day trade.

The BSE market breadth was skewed in favour of the bulls — with 2,011 advances and 736 declines. On Wednesday, the key Indian indices reacted adversely to the victory of Republican candidate Dold Trump in the US presidential election and the union government’s decision to demonetise Rs 500 and Rs 1,000 currency notes.

The barometer index plunged by 338.61 points, or 1.23 per cent, and the Nifty had dropped by 111.55 points, or 1.31 per cent. Initially on Thursday, the benchmark indices shed off their previous losses and opened on a higher note in sync with their Asian peers.

Besides, the overall sentiment in the global markets remained positive after the uncertainties of the US presidential election were wiped off. Moreover, the domestic markets were boosted as the government’s decision to demonetise as an effort to curb black money circulation was welcomed by most market participants.

“With markets relieved of uncertainty, risk appetite improved vastly, pushing indices above pre-US election levels,” said And James, Chief Market Strategist, Geojit BNP Paribas Fincial Services. “Meanwhile, as banking activities resumed and disbursal of new currencies started, banking stocks also surged, with the increased footfalls in branches raising the possibility of rising deposits and transactions going forward, which augurs well for the banking sector, notwithstanding the potential easing of strain on the banking system, that PM’s demonetisation drive could bring about,” he said.

However, some gains were capped due to profit booking in the second half of the trade session. Moreover, depreciation of the rupee and an outflow of foreign funds arrested the rise of the key indices.

The Indian rupee weakened by 20 paise to 66.63 against a US dollar from its previous close of 66.43 to a greenback. According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, the CNX Nifty traded with firm sentiments for most part of the day’s trade. However, it witnessed resistance at higher levels in second half of the session due to profit booking.

“Recovery in USD/INR futures prices in the second half of the session limited the upside in Nifty. Some IT stocks witnessed selling pressure, while banking, pharma, media-entertainment, FMCG and oil-gas stocks maged to hold the gains,” Desai said. “Auto stocks witnessed selling pressure from higher levels mainly due to profit booking. Textile, aviation and cement stocks traded with mixed sentiments, while power stocks traded firm on buying support.”

In terms of investments, provisiol data with exchanges showed that the foreign institutiol investors (FIIs) sold stocks worth Rs 733.49 crore, and the domestic institutiol investors (DIIs) purchased scrip worth Rs 639.19 crore. Sector-wise, the S&P BSE banking index surged by 811.39 points, the metal index rose by 627.30 points, and the capital goods index edged up by 250.49 points.

In contrast, the S&P BSE automobile index plunged by 153.49 points, the IT index declined by 68.15 points, and the consumer discretiory goods and services index ended lower by 9.04 points. Major Sensex gainers during Thursday’s trade were: Tata Steel, up 9.27 per cent at Rs 436.85; State Bank of India (SBI), up 8.41 per cent at Rs 281.60; Cipla, up 6.85 per cent at Rs 564.25; Coal India, up 4.91 per cent at Rs 333.50; and Power Grid, up 4.38 per cent at Rs 188.35.

Major Sensex losers were: Asian Paints, down 3.50 per cent at Rs 1,014.50; Hero MotoCorp, down 2.82 per cent at Rs 3,144.55; Lupin, down 2.34 per cent at Rs 1,493.20; HDFC, down 2.28 per cent at Rs 1,318.40; and Infosys, down 1.80 per cent at Rs 938.60. (IANS)