Value buying propels markets; Sensex closes 170 points up (Roundup)

Mumbai, Dec 15 (IANS) Despite investors’ concerns over a likely US rate hike and disappointing inflation macro data, a barometer index of the Indian equity markets gained 170 points on Tuesday on the back of value buying.

Initially, both the bellwether indices of the Indian equity markets opened on a slightly positive note in sync with their Asian peers and a rebound in oil prices that supported energy stocks.

Nevertheless, latest figures showing a firming up trend in annual wholesale and retail inflation weighed on the markets which ceded their marginal gains.

In addition, Finance Minister Arun Jaitley’s comments which indicated a washout of the winter session due to a parliamentary logjam subdued sentiments. The impasse will delay the passage of key economic legislations like the Goods and Services Tax (GST) bill.

Should the bill not secure clearance in this session, it will miss its intended roll-out date of April 1 next year.

Besides the GST, investors were cautious ahead of the US Fed’s Federal Open Market Committee (FOMC) meet slated for Tuesday-Wednesday.

The FOMC will decide whether or not to raise interest rates in the US. A hike in interest rates which have been at near-zero levels since the last decade will lead to a massive pull-back of foreign funds from emerging economies like India.

It is also expected to dent business margins as access to capital from the US will become expensive.

Notwithstanding the downward trajectory, however, markets rose on the back of value buying.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day’s trade up by 170 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day’s trade in the green. It closed higher by 50.85 points or 0.66 percent at 7,700.90 points.

The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,186.68 points, closed at 25,320.44 points — up 170.09 points or 0.68 percent from the previous day’s close at 25,150.35 points.

The Sensex touched a high of 25,342.78 points and a low of 25,075.54 points during the intra-day trade.

“Rising inflation figures and finance minister’s comments on the winter session of parliament had initially reined in Monday’s gains. However, value buying lifted markets sentiments,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

On Monday, the Sensex gained by 105.92 points or 0.42 percent, while the Nifty rose by 39.60 points or 0.52 percent.

Nitasha Shankar, vice president for research with YES Securities, said that Indian markets extended gains for second day running to end on a positive note, ahead of the much awaited FOMC meet.

“Broader markets also advanced in line with the headline index. Market breadth favoured the bulls with 1,577 advances and 1,070 declines,” Shankar told IANS.

“PSU (public sector undertakings) bank stocks continued to remain under pressure weighing on the bank index. Auto and FMCG (Fast Moving Consumer Goods) stocks saw fresh buying interest.”

Both foreign institutional investors (FIIs) and the domestic institutional investors (DIIs) were net buyers during the day’s trade.

According to data with stock exchanges, FIIs bought stocks worth Rs.48.67 crore, while DIIs invested Rs.273.93 crore.

Sector-wise, healthy buying was witnessed in automobile, consumer durables and FMCG sectors.

On the other hand, metal and technology, entertainment and media (TECK) scrip ended in the red during the day’s trade.

The S&P BSE automobile index augmented by 234.28 points, consumer durables index gained by 177.74 points and FMCG index was higher by 80.49 points.

The S&P BSE metal index was lower by 15.43 points and TECK index slipped by 3.27 points.

Major Sensex gainers during Tuesday’s trade were Lupin, up 2.44 percent at Rs.1,790.05; Hindustan Unilever, up 2.28 percent at Rs.856.30; Reliance Industries, up 2.14 percent at Rs.975.90; ONGC, up 2.06 percent at Rs.217.85; and Tata Motors, up 2.04 percent at Rs.379.30.

The major Sensex losers were Wipro, down 1.53 percent at Rs.558.60; ICICI Bank, down 1.04 percent at Rs.246.35; NTPC, down 1.02 percent at Rs.131.40; Vedanta, down 0.77 percent at Rs.83.80; and BHEL, down 0.57 percent at Rs.166.10.

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