Reforms, value buying slightly buoys equity markets (Roundup)

Mumbai, March 22 (IANS) Government reforms to increase foreign capital inflows and value buying marginally buoyed the Indian equity markets on Tuesday.

In contrast, both the key indices of the Indian equity markets remained in the negative territory throughout the day’s trade, as investors were seen cautious over a potential US rate hike, negative Chinese indices and profit booking.

However, the key equity indices pared their initial losses during the last hour of the day’s trade.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day’s trade flat. It gained just 45 points or 0.18 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s traded marginally in the green. It inched up by 10.65 points, or 0.14 percent, to 7,714.90 points.

The Sensex, which opened at 25,331.01 points, closed at 25,330.49 points — up 45.12 points or 0.18 percent from the previous day’s close at 25,285.37 points.

During the intra-day trade, the Sensex touched a high of 25,381.33 points and a low of 25,083.70 points.

The BSE market breadth slightly favoured the bulls — with 1,353 advances and 1,256 declines.

According to market analysts, caution prevailed on the heightened chances of a US rate hike next month.

Besides, investors were seen hesitant to chase prices higher ahead of the derivatives expiry and the financial year end.

In addition, negative Chinese indices, coupled with a slightly weaker rupee, dampened sentiments.

The rupee weakened by 20 paise during the day’s trade. It ended at 66.72 to a US dollar from its previous close of 66.51-52 to a greenback.

Sentiments were further dented after Monday’s data showed a current account deficit (CAD) showed wider than expected fall.

However, the markets were able to pare some of its losses on the back of positive government announcements and value buying.

“Positives moves by the government to increase the forign investment inflows and value buying supported prices at the end of the day’s trade. Initially, heightened chances of a US rate hike, negative Chinese markets, weak rupee and profit booking had dented investors’ sentiments,” 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, elaborated that: ” We expect the markets to remain under pressure as this is a curtailed week and take some gains off the table ahead of the long weekend.”

Nitasha Shankar, senior vice president for research with YES Securities said: “Volumes picked up in the late buying affirming the short term bullishness dominant at the moment. Broader markets also ended on a positive outperforming the headline indices.”

“High beta stocks witnessed buying interest. Market breadth returned in favour of the bulls after initial dip; closing with 1,350 stocks in the advances and 1,275 stocks in the declines. FMCG, bank and pharma indices ended in the red led by profit booking. Reality, metal, auto and energy indices ended with handsome gains,” Shankar noted.

Furthermore, foreign institutional investors (FIIs) were net buyers during the day’s trade, while the domestic institutional investors (DIIs) sold stocks.

The data with stock exchanges showed that FIIs invested Rs.1,095.44 crore, while the DIIs sold stocks worth Rs.930.37 crore.

Sector-wise, healthy buying was witnessed in automobile, consumer durables and capital goods stocks, where as scrip of fast moving consumer goods (FMCG), banking and IT (information technology) came under selling pressure.

The S&P BSE automobile index augmented by 190.02 points, followed by consumer durables index which edged up by 183.06 points and the capital goods index rose by 152.02 points.

The S&P BSE FMCG index receded by 90.57 points, followed by banking index which inched down by 1.93 points and the IT index dipped by 0.21 points.

Major Sensex gainers during Tuesday’s trade were BHEL, up 4.29 percent at Rs.116.75; Hero MotoCorp, up 2.28 percent at Rs.2,866.75 ; Tata Steel, up 2.16 percent at Rs.309.45; Mahindra & Mahindra, up 2.09 percent at Rs.1,253.15; and HDFC, up 1.26 percent at Rs.1,166.55.

Major Sensex losers during the day’s trade were Dr.Reddy’s Lab, down 3.78 percent at Rs.3,062.60; ITC, down 2.03 percent at Rs.323.70, Adani Ports, down 1.83 percent at Rs.239.30 , Hindustan Unilever, down 1.02 percent at Rs.871.35 and Wipro, down 0.77 percent at Rs.553.05.

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