Short-coverings inch-up markets, Sensex gains 43 points

Mumbai, Jan 1:  Short-coverings, coupled with hopes for monetary easing by the Reserve Bank of India (RBI), led to the Indian equity markets inching up margilly on Friday. This led to a barometer index of the Indian equity markets closing the day’s trade on a flat note with a gain of a mere 43 points. Initially, both the bellwether indices of the Indian equity markets opened in the red, due to lack of participation coupled with disappointing macro data that prompted some investors to book profits at lower levels.

Besides, investors were seen cautious regarding the upcoming macro data of purchasing magers’ index (PMI) slated to be released on Monday and the third-quarter earnings season which starts from January 14.

However, bellwether indices soon pared their losses on the back of short-coverings and hopes that the RBI will reduce key lending rates after Thursday’s disappointing macro data points. Moreover, a bounce back in commodity prices globally, strengthening of the rupee and increase in buying activity from foreign portfolio investors (FPIs) boosted sentiments.

Even the expectations that Nifty would breach the 8,000-level mark and minor value buying at the lower levels pushed up prices. The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) edged up slightly by 43 points, or 0.17 percent. Similarly, the wider 50-scrip Nifty of the tiol Stock Exchange (NSE) also ended flat. It rose by only 17 points, or 0.21 percent, at 7,963.20 points. The Sensex of the S&P BSE, which opened at 26,101.50 points, closed at 26,160.90 points — up a paltry 43.36 points or 0.17 percent from the previous day’s close at 26,117.54 points. The Sensex touched a high of 26,197.27 points and a low of 26,008.20 points in intra-day trade.

The Sensex closed the previous session on December 31, up 158 points, or 0.61 percent, while the Nifty was higher by 50 points, or 0.63 percent. “Short-coverings and the large build-up in bank Nifty supported the minor relief rally,” And James, co-head, technical research desk with Geojit BNP Paribas Fincial Services, told IANS.

“The disappointing macro data points which were released yesterday gave hope to some investors that the RBI may ease key lending rates in its monetary policy review slated for February.” Vaibhav Agarwal, vice president and research head with Angel Broking, elaborated that benchmarks continued to trade in a rrow range in the absence of any major trigger.

“Broader markets however, continued to outperform with both the BSE midcap and small cap indices gaining nearly a percent each and market breadth firmly favoured the advances,” said Agarwal.

“Global markets were shut for the new year’s holiday leading to lower volumes. We expect volumes to pick up from the next week and expect the third quarter earnings and economic data to provide further cues.”

The foreign institutiol investors (FIIs) were net buyers in the day’s trade, whereas domestic institutiol investors (DIIs) were net sellers. According to data with stock exchanges, FIIs invested Rs.228.11 crore, while DIIs sold stocks worth Rs.81.24 crore.

Despite FIIs inflows, the rupee closed flat during the day’s trade. It closed at 66.14 to a US dollar from its previous close of 66.15 to a greenback. Sector-wise, healthy buying was witnessed in automobile, capital goods and banking stocks. The S&P BSE automobile index augmented by 172.09 points, capital goods index gained by 142.79 points and banking index rose by 119.61 points. On the other hand, information technology (IT) and technology, entertainment and media (TECK) scrip ended in the red. The S&P BSE IT index receded by 37.98 points and TECK index declined by 18.37 points.

Major Sensex gainers during Friday’s trade were Tata Motors, up 2.66 percent at Rs.401.65; Adani Ports, up 2.65 percent at Rs.267.50; Coal India, up 1.58 percent at Rs.333.90; State Bank of India (SBI), up 1.45 percent at Rs.227.65; and BHEL, up 1.03 percent at Rs.171.

The major Sensex losers were Gail, down 1.49 percent at Rs.369.80; NTPC, down 1.03 percent at Rs.144.40; Tata Consultancy Services (TCS), down 0.94 percent at Rs.2,416.25; Tata Steel, down 0.87 percent at Rs.257.30; and Hindustan Unilever, down 0.67 percent at Rs.856.55. (IANS)