Positive European cues, value-buying buoys markets (Roundup)

Mumbai, Feb 17 (IANS) Positive European indices, steep rise in crude oil prices and value-buying buoyed the Indian equity markets on Wednesday.

The late surge in the markets came after panic selling and the dwindling rupee value depressed investor sentiments during most of the day’s trade.

Consequently, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day’s trade higher by 190 points, after an intra-day swing of 514 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s trade in the positive territory. It was higher by 60.20 points or 0.85 percent at 7,108.45 points.

The Sensex, which opened at 23,237.23 points, closed at 23,381.87 points — up 189.90 points or 0.82 percent from the previous day’s close at 23,191.97 points.

During the intra-day trade, the Sensex touched a high of 23,434.91 points and a low of 22,920.84 points.

In contrast, the BSE market breadth ended flat. However, it slightly favoured the bears — with 1,488 declines and only 1,072 advances.

Initially, both the indices of the Indian equity markets opened on a positive note, as a result of healthy gains made in the US markets on Tuesday.

Besides, a rise in crude oil prices, which climbed to over $30 a barrel (one barrel is equal to 159 litres), led investors to chase stock prices higher.

Notwithstanding the rise, caution-selling and profit bookings on the back of rising non-performing assets (NPAs) levels of the banking sector dragged the markets lower.

Moreover, investors’ confidence was eroded by the continuing conflict between the ruling NDA (National Democratic Alliance) and the opposition, which is seen as having a bearing on some key economic legislations that await parliamentary approval during the upcoming session.

The central government is expected to push through major economic legislations like bankruptcy code and Goods and Services Tax (GST) Bill during the upcoming Budget session.

In addition, a weak rupee dented the equity markets. It weakened by nine paise to 68.47 against a US dollar from its previous close of 68.37-38 to a greenback.

During the intra-day trade, the Indian rupee touched its lowest level since early September 2013 at 68.67 level on spot.

“Indian rupee touched the lowest point since September 2013 as prices after opening around 68.50 levels on spot, went on to depreciate towards 68.67 levels on spot,” Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.

“There was a heavy intervention by the Reserve Bank of India (RBI) to arrest the slide in the rupee’s value.”

Further, investors were seen cautious ahead of Federal Reserve’s January meeting minutes which are expected to be released later in the day.

But, a positive opening to the European markets gave a boost to investors’ sentiments. Value buying was witnessed at the lower levels.

“Volatility dragged the equity markets down during most of the day’s trade. Volatility was triggered by caution selling and profit-booking,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“The slide in rupee’s value too dented sentiments. However, positive European markets and value buying restored investors’ risk taking appetite.”

Vaibhav Agarwal, vice president and research head at Angel Broking, pointed out that

the pullback rally was led by oil and gas, auto, pharma and information technology (IT) stocks.

“We expect volatility to prevail in the market ahead of the Union Budget,” Agarwal predicted.

Nitasha Shankar, vice president for research with YES Securities, cited that volumes picked up in the pull back rally suggesting short covering portending to a temporary pause in the corrective wave.

“Broader markets also recovered from day’s low to end trade in the green; however, they underperformed the headline index,” Shankar noted.

“PSU bank index reversed sharply after initial decline to end with gains of two percent.”

Sector-wise, healthcare, automobile, oil and gas, IT and fast moving consumer goods (FMCG) indices made healthy gains during the days trade.

The healthcare index zoomed by 235.09 points, automobile index rocketed by 167.97 points, oil and gas index augmented by 116.05 points, IT index appreciated by 91.10 points and the FMCG index edged up by 58.40 points.

On the other hand, consumer durables index plunged by 275.09 points, followed by banking index which was lower by 37.55 points and finance index down by 2.21 points.

The foreign institutional investors (FIIs) were net sellers during the day’s trade, while the domestic institutional investors (DIIs) bought stocks.

The data with stock exchanges showed that FIIs divested Rs.560 crore, while the DIIs’ bought stocks worth Rs.384.53 crore.

Major Sensex gainers during Wednesday’s trade were Adani Ports, up 5.84 percent at Rs.212.10; Dr.Reddy’s Lab, up 3.52 percent at Rs.2,961.05; Sunpharma, up 3.29 percent at Rs.854.55; Tata Motors, up 3.02 percent at Rs.310.10; and Tata Steel, up 2.65 percent at Rs.251.35.

Major Sensex losers during the day’s trade were ICICI Bank, down 3.10 percent at Rs.190.70; Coal India, down 1.71 percent at Rs.312.95; Lupin, down 1.40 percent at Rs.1,730.70; Cipla, down 0.83 percent at Rs.519.70; and Axis Bank, down 0.49 percent at Rs.403.55.

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