Mumbai, June 10 : After six consecutive sessions of losses, a benchmark index of the Indian equities markets, the 30-scrip Sensitive Index (Sensex), surged by around 400 points or more than 1.30 percent during the trade session on Wednesday.
Major positive global cues like the deferment of the inclusion of Chi’s ‘A’ shares into the MSCI (Morgan Stanley Capital Intertiol) EM (emerging markets) index, buoyed investor sentiments.
There was a possibility that India’s weightage in the index may have been reduced, as a result of the entry of Chinese stocks and thus affect capital flows. The wider 50-scrip Nifty of the tiol Stock Exchange (NSE) also made gains during the day’s trade. It closed 102.05 points or 1.27 percent up at 8,124.45 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 26,517.32 points, closed the day’s trade at 26,840.50 points, up 359.25 points or 1.36 percent from the previous day’s close at 26,481.25 points.
The Sensex touched a high of 26,934.74 points and a low of 26,493.29 points in the intra-day trade.
For the last six consecutive sessions the Indian markets continued their downtrend on account of lower-than-expected easing of the monetary policy by the apex bank, the US Fed rate hike decision, delays over Greece loan repayment, weak monsoon forecast and disappointing quarterly earnings.
Alysts covering the day’s trade said that the delay in MSCI’s decision to include Chi ‘A’ shares in the EM index had weighed on the market performance in June.
“Now as the decision of inclusion has been delayed, market has viewed this positively. However, we believe market is likely to focus back on earnings growth outlook. So, we are likely to consolidate further down. Also, recent crude prices and rupee valuation are not supportive for the market,” said Vinod ir, head for fundamental research, Geojit BNP Paribas Fincial Services.
Alysts also pointed out many negative triggers for the markets in the coming days such as the Australian weather department’s warnings over the El Nino phenomenon and continuing inflation worries as crude oil edged higher on the back of improved demand and expectations of falling US shale gas production. “A relief rally was witnessed at the bourses on the back of short covering, lower level buying. Deferral of Chi’s shares into MSCI index, strong global cues and stronger rupee lifted the sentiment,” said Gaurav Jain, director, Hem Securities. “The market strengthened further in the afternoon trade, supported by short covering in banking, oil, technology and capital goods stocks,” Jain added. During Wednesday’s trade session, healthy buying was observed in capital goods, automobiles, banks, information technology (IT), healthcare, oil and gas, technology, entertainment and media (TECK) and consumer durables sectors. (ians)