Short covering propels equity markets

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Mumbai, June 30 (IANS) Short covering on the back of latest key economic decisions, combined with positive global cues and a firm rupee, propelled the Indian equity markets on Thursday into making healthy gains.

Sectorwise, all the sub-indices witnessed healthy buying which was led by banking, automobile and capital goods stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) gained by 99.25 points or 1.21 per cent, at 8,303.25 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,926.17 points, traded at 27,054.34 points (at 2.10 p.m.)– up 313.95 points or 1.17 per cent from the previous close at 26,740.36 points.

The Sensex has so far touched a high of 27,058.54 points and a low of 26,872.59 points during the intra-day trade.

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The BSE market breadth was tilted in favour of the bulls — with 1,620 advances and 865 declines.

On Wednesday, the key indices ended with appreciable gains prompted by positive global and domestic cues. The barometer index surged by 215.84 points or 0.81 per cent, while the Nifty edged up by 76.15 points or 0.94 per cent.

Initially on Thursday, the key indices opened on a positive note, in sync with their Asian peers.

The equity markets gained on the back of reduced uncertainty over the modalities of Britain’s exit from the European Union (Brexit).

Investors were also hopeful that international central banks might go in for major stimulus measures to protect growth as a result of Brexit.

Further, higher global crude oil prices and a firm rupee enhanced investors’ risk-taking appetite.

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Besides, government’s decision on Wednesday to accept the Seventh Pay Commission’s recommendations supported prices.

In addition, reports of a reduction in monsoon rains’ deficit and increased chances of the GST (Goods and Services Tax) bill getting parliament’s nod lifted prices.

However, gains were capped as investors turned cautious due to the ongoing F&O (futures and options) expiry.

“Nifty opened firm by tracking positive global cues. Banking sector stocks traded firm on buying support,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Pharma sector stocks traded with mix sentiments on profit booking at higher levels. Auto sector stocks continued their previous day’s gain in today’s session as well on better future outlook for the industry.”

According to Nitasha Shankar, Senior Vice President for Research with YES Securities, Indian markets outshined their global peers.

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“However, benchmark indices could turn volatile in second half of the session owing to the F&O expiry,” Shankar noted.

“Midcap and smallcap indices continue to build on their rising trends. Media, bank and realty indices are dominating with handsome gains.”



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