Global cues, short-covering lift markets, Sensex up 172 points
| Wednesday, January 13, 2016 - 21:36
Mumbai: Positive global indices, coupled with short-covering and value buying, buoyed the Indian equity markets on Wednesday.
This led to a barometer index of the Indian equity markets to gain 172 points. It is the first gains after two consecutive sessions of falls.
The upward movement came during the late afternoon trade session after the index touched a new 52-week low.
The late upswing in trade was supported by positive European indices which prompted short-covering. Value buying at lower levels and positive Chinese export data restored investors' risk-taking appetite.
Initially, both the bellwether indices of the Indian equity markets made gains due to value buying at lower levels that was prompted by attractive prices.
However, both indices soon ceded their gains as investors got spooked after several stocks hit their 52-week lows.
In addition, disappointing macro-economic data points on the country's factory output and retail inflation that were released after market hours on Tuesday.
Besides, anxiety was stoked by the third quarter (Q3) results season that started on Tuesday.
Long-liquidation positions and sliding Chinese markets, too, dented investors' sentiments.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the volatile session on a high note. It gained 172 points, or 0.70 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade in the green. It went up 52.10 points or 0.69 percent at 7,562.40 points.
Notwithstanding this, the NSE Nifty again breached the psychological level of 7,500 points during the intra-day trade.
Nifty witnessed wild swings of 175 points during the intra-day trade, as it touched a new 52-week low at 7,425.80 points.
The S&P BSE Sensex which opened at 24,804.64 points, closed at 24,854.11 points, up 172.08 points or 0.70 percent from the previous day's close at 24,682.03 points.
During the intra-day trade, the Sensex touched a high of 24,956.54 points and a low of 24,387.69 points -- its new low in 52 weeks.
In contrast, the S&P BSE market breadth still favoured the bears -- with 2,198 declines and 609 advances.
In the last two sessions of falls, the Sensex receded by 252 points, while Nifty lost 92 points.
"Positive global markets, except those of China, have prompted short-covering that led to the upswing at which the markets closed," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"We have had a positive opening based on yesterday's close and value buying. However, the general weakness persisted and led to a sharp decline during the intra-day trade."
Nitasha Shankar, vice president for research with YES Securities, elaborated that the broader markets recovered marginally after plummeting sharply lower in early trade; however, they ended in the red.
"Market breadth remained weak as the recovery was led by large cap index heavy weight stocks. Banking index also recovered, led by buying in private banks," Shankar noted.
Sector-wise, healthy buying was observed in automobile, banking and information technology (IT) stocks.
The S&P BSE automobile index augmented by 153.58 points, banking index gained by 117.81 points and IT index closed higher by 72.68 points.
On the other hand, shares of capital goods, healthcare and industrials came under selling pressure.
The S&P BSE capital goods index plunged by 176.68 points, healthcare index receded by 120.99 points and industrials index declined by 26.47 points.
The foreign institutional investors (FIIs) were net sellers during the day's trade, while domestic institutional investors (DIIs) were net buyers.
According to data with stock exchanges, FIIs divested Rs.75.90 crore, while DIIs bought stocks worth Rs.618.79 crore.
Despite FIIs pull-out, the rupee ended flat at 66.85 to a US dollar from its previous close of 66.86-87 to a greenback.
Major Sensex gainers during Wednesday's trade were Reliance Industries, up 3.09 percent at Rs.1,077.35; Infosys, up 3.08 percent at Rs.1,082.35; Tata Motors, up 2.65 percent at Rs.364.45; Mahindra and Mahindra, up 1.97 percent at Rs.1,205.40; and Hindustan Unilever, up 1.41 percent at Rs.831.05.
Major Sensex losers during day's trade were Adani Ports, down 2.65 percent at Rs.229.95; Bharti Airtel, down 2.05 percent at Rs.308.70; Lupin, down 2.01 percent at Rs.1,667.60; Tata Consultancy Services (TCS), down 1.88 percent at Rs.2,280.30; and Larsen and Toubro (L&T), down 1.85 percent at Rs.1,157.80.