Mumbai: Value buying, coupled with positive Asian indices and hopes of a political consensus over key economic legislations buoyed Indian equity markets on Friday. This resulted in the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) to gain 83 points, a day after it touched a new 52-week low.
Over the last four sessions, the barometer Sensex has plunged by 1,309.51 points, while the wider 50-scrip Nifty of the National Stock Exchange (NSE) has lost 395.35 points.
On Friday, both the bellwether indices opened on a positive note in sync with their Asian peers. Asian markets gained after China decided to put quick-fixes to its falling markets such as the suspension of the circuit-breaker system which halted trading twice this week.
The Chinese administration raised the guidance rate for the yuan and asked state-controlled funds to buy equities. It was a rout in the Chinese markets which cascaded into a global sell-off on Thursday.
The recovery rally in the Indian equity markets was supported by value buying, as a sizeable number of stocks was trading at yearly lows after four consecutive sessions of slide.
In addition, the central government’s effort to reach out to the opposition to break the impasse over the Goods and Services Tax (GST) Bill restored investors’ confidence.
The positive bias was even supported by the fact that international oil prices had tumbled to levels below $30 per barrel. A barrel equals 169 litres.
Aata indicating a strengthening US jobs market also cheered investors.
However, the gains were capped by the long-liquidation positions and the upcoming US non-farm payroll figures scheduled for release on Friday evening India time. The US data can provide indications on future US rate hikes.
Besides, caution prevailed over the upcoming domestic macro-data on industrial output, retail inflation and the third-quarter earning results which start coming in from January 12.
The barometer S&P BSE Sensex closed 83 points, or 0.33 percent higher. Similarly, the wider NSE Nifty ended the day’s trade in the green. It closed higher by 33.05 points, or 0.44 percent at 7,601.35 points.
The Sensex of the S&P BSE, which opened at 24,969.02 points, closed at 24,934.33 points — up 82.50 points, or 0.33 percent from the previous day’s close at 24,851.83 points.
The Sensex touched a high of 25,083.55 points and a low of 24,887.22 points in intra-day trade. The S&P BSE market breadth favoured the bulls — with 1,948 advances and 821 declines.
“The slide of nearly 6 percent at the bellwethers and the fact that many stocks are nearing their yearly lows prompted value buying,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
Vaibhav Agarwal, vice president and research head at Angel Broking, said: “Markets continue to look towards global cues for direction and third quarter (Q3) earnings starting next week would be the key trigger for the markets on the domestic front.”
Nitasha Shankar, vice president for research with YES Securities, elaborated that Indian VIX (volatility index) has turned down from upper band suggesting minor pull back rallies before markets resumes correction.
Sector-wise, oil and gas, information technology (IT) and consumer durables indices came under selling pressure. The S&P BSE oil and gas index augmented by 131.30 points, IT index gained by 119.82 points and consumer durables index closed higher by 101.44 points.
On the other hand, capital goods index declined by 89.08 points and metal index edged-down by 4.44 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.1,236.95 crore, while DIIs bought stocks worth Rs.1,003.99 crore.
Despite FIIs pull-out, the rupee strengthened during the day’s trade. It gained by 29 paise to close at 66.64 to a US dollar from its previous close of 66.93 to a greenback.