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Value buying, positive European markets lift domestic indices

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  25 May 2016 12:00 AM GMT

Mumbai, May 24: Value buying, along with positive European indices, pushed the Indian equity markets higher on Tuesday. Consequently, the key indices which oscillated within a rrow range, closed in the green, as healthy buying was witnessed in automobile, banking and fince stocks. The wider 51-scrip Nifty of the tiol Stock Exchange (NSE) edged up by 17.80 points or 0.23 percent, at 7,748.85 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,256.97 points, closed at 25,305.47 points — up 75.11 points or 0.30 percent from the previous close at 25,230.36 points. The Sensex touched a high of 25,340.47 points and a low of 25,181.47 points during the intra-day trade.

In contrast, the BSE market breadth was skewed in favour of the bears — with 1,629 declines and 895 advances. Both the key Indian indices had ended on a lower note during the previous trade session on Monday.

The barometer index had fallen by 71.54 points or 0.28 percent, while the NSE Nifty had slipped by 18.65 points or 0.24 percent.

Initially, the key indices opened on a flat note, depressed by weak Asian markets, which were impacted by negative macro-economic data from Japan. The domestic markets soon receded on the back of risk-aversion on the renewed fears of a US rate hike in June. A hike is expected to lead FPIs (Foreign Portfolio Investors) away from emerging markets such as India.

This had led to an outflow of foreign funds from the domestic equity markets on Monday. Further, caution prevailed ahead of the release of revised first quarter US GDP (gross domestic product) data. Besides, investors were seen reluctant to chase prices due to the upcoming F&O (futures and options) expiry, weak rupee and a dip in global crude oil prices.

However, the key indices pared some of their losses on the back of value buying at key levels, after four consecutive sessions of losses. In addition, positive European indices, restored investor confidence and supported prices. The European markets rose after data from Germany’s Federal Statistical Office showed that economic growth accelerated at the start of the year.

“Negative Asian indices, along with renewed fears of a US rate hike in June and a weak rupee had initially depressed the Indian markets,” And James, chief market strategist, Geojit BNP Paribas Fincial Services, told IANS. “However, value buying at key levels and positive European markets supported prices and helped equity markets pare some of their losses.”

According to Dhruv Desai, director and chief operating officer of Tradebulls, stock specific action was witnessed as ongoing earnings season created an impact on individual stocks. “Looming effect of a US Fed rate hike is making US dollar stronger and thus creating pressure on emerging markets like India. In the current market environment any bounce back is unlikely,” Desai told IANS. During the day’s trade, the foreign institutiol investors (FIIs) turned net sellers, while the domestic institutiol investors (DIIs) were net buyers. Data with stock exchanges showed that the FIIs sold scrip worth Rs.815.53 crore, while the DIIs purchased stocks worth Rs.989.95 crore. Sector-wise, healthy buying was witnessed in stocks of automobile, banking and fince, whereas scrip of healthcare, oil and gas, and capital goods came under heavy selling pressure.

The S&P automobile index surged by 57.02 points, followed by the oil and gas index, which gained by 51.04 points; and the fince index rose by 15.91 points.

In contrast, the S&P BSE healthcare index plunged by 133.04 points, followed by the oil and gas index, which declined by 91.16 points; and the capital goods index receded by 38.20 points. Major Sensex gainers during Tuesday’s trade were NTPC, up 2.03 percent at Rs.138.45; Tata Motors, up 1.70 percent at Rs.389.25; ICICI Bank, up 1.56 percent at Rs.224.40; Tata Steel, up 1.28 percent, at Rs.317.60; and HDFC, up 1.09 percent at Rs.1,173.30. Major Sensex losers were Sun Pharmaceuticals, down 1.47 percent at Rs.772.80; Bajaj Auto, down 1.33 percent at Rs.2,384.50; Tata Consultancy Services (TCS), down 0.97 percent at Rs.2,467.50; BHEL, down 0.84 percent at Rs.117.55; and ONGC, down 0.79 percent at Rs.206.65. (IANS)

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