Short-coverings buoy markets; Sensex up 59 points

Mumbai, Dec 31 (IANS) Short coverings on account of derivatives expiry, coupled with minor value buying at lower levels buoyed Indian equity markets during the mid-afternoon trade session on Thursday.

This led to a barometer index of the Indian equity markets gaining 59 points.

Initially, both the bellwether indices of the Indian equity markets opened on a mildly positive note due to value buying after Wednesday’s fall.

However, markets ceded their gains, as lack of investors’ participation coupled with unwinding of long positions, as also uncertainties over upcoming macro data depressed sentiments and prompted some investors to book profits at higher levels.

Data with the stock exchanges showed that the volumes in cash markets across key bellwether indices eased to Rs.15,000 crore on Wednesday.

Besides, investors were seen cautious regarding the upcoming macro data of monthly eight core industries (ECI) output, purchasing mangers index (PMIs) and third-quarter earnings season which starts from January 14.

Nevertheless, expectations that Nifty will breach the 8,000-level mark and short-covering on account of futures and options (F&O) expiry pushed up prices.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) was trading higher by 59 points, or 0.23 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading in the positive territory. It was higher by 22.45 points, or 0.28 percent, at 7,918.70 points.

The Sensex of the S&P BSE, which opened at 25,980.86 points, was trading at 26,019.06 points (at 2.15 p.m.) — up 59.03 points or 0.23 percent from the previous day’s close at 25,960.03 points.

The Sensex has so far touched a high of 26,029.30 points and a low of 25,941.91 points during the intra-day trade.

“Short-coverings on account of derivatives expiry supported upward movements in markets. There was some value buying at the start of the trading session due to yesterday’s fall,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

“However, investors still remain cautious and reluctant to chase prices due to lack of fresh triggers, thin volumes and upcoming macro data points.”

Vaibhav Agarwal, vice president and research head with Angel Broking, elaborated that markets continue to trade on a flat note with a positive bias as selling pressure on account of the F&O expiry abated.

“We expect trading to remain lacklustre this week led by low FII (Foreign Institutional Investors) volumes on account of the new year holidays,” Agarwal said.

“The start of the earnings season and economic data releases in January would be the key trigger to drive markets.”

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