Mumbai, Jan 8 (IANS) Value buying, coupled with positive Asian indices and hopes of political consensus over key economic legislations, buoyed Indian equity markets during the late-afternoon trade session on Friday.
This resulted in the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gaining 117 points, a day after it touched a new 52-week low.
During 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.
Furthermore, the recovery rally in the Indian equity markets was supported by value buying, as a sizeable number of stocks were trading at their 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 on the Goods and Services Tax (GST) Bill restored investors’ confidence.
The fact that international oil prices had tumbled to under $30 per barrel levels supported the positive bias.
Moreover, positive data indicating a strengthening US jobs market 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 rose by 117 points, or 0.47 percent.
Similarly, the wider NSE Nifty made gains during the late-afternoon trade session. It was higher by 40 points, or 0.52 percent at 7,607.95 points.
The Sensex of the S&P BSE, which opened at 24,969.02 points, was trading at 24,968.56 points (at 2.45 p.m.) — up 116.73 points, or 0.47 percent from the previous day’s close at 24,851.83 points.
The Sensex has so far 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 1,957 advances and 727 declines.
“The slide of nearly 6 percent at the bellwethers and the fact that many stocks are nearing their yearly lows has 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 markets were trading in the green following sharp decline on Thursday indicating a pause before corrective wave resumes again.
“Indian VIX (volatility index) has turned down from upper band suggesting minor pull back rallies before market resumes correction,” Shankar noted.