Value buying, short covering buoy equity markets

Mumbai, April 26 (IANS) Value buying, along with short covering and healthy quarterly results, swelled the Indian equity markets on Tuesday.

This led the key indices of the Indian equity markets to make healthy gains during the day's trade.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) closed higher by 107.60 points or 1.37 percent, at 7,962.65 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 25,604.92 points, closed at 26,007.30 points -- up 328.37 points, or 1.28 percent, from the previous close at 25,678.93 points.

The Sensex touched a high of 26,055 points and a low of 25,549.05 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls -- with 1,581 advances and 995 declines.

Both the key indices had ended on a negative note during the previous trade session on Monday. The barometer index had closed lower by 159 points or 0.62 percent, while the NSE Nifty slipped by 44 points or 0.56 percent.

Initially on Tuesday, the key indices opened on a negative note in-sync with their Asian peers.

Investors were seen cautious ahead of the US FOMC (US federal open market committee) meet slated for April 27-28 and the Bank of Japan's (BoJ) monetary policy review.

The US FOMC meet assumes significance as it will decide the future course of the US interest rates. A hike in interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.

Besides, unwinding of long positions ahead of the futures and options (F&O) expiry dented sentiments.

However, value buying on the back of three consecutive days of fall lifted prices.

In addition, short covering, healthy quarterly results and positive European markets supported the equity market's upward movement.

"Value buying coming on the back of three days of fall prompted short covering. This along with healthy quarterly results and positive European markets lifted prices," Anand James, chief market strategist, Geojit BNP Paribas Financial Services, told IANS.

According to Vaibhav Agarwal, vice president and research head at Angel Broking, the Indian equity markets opened on a flat note led by weak Asian cues.

"Asian stocks were mixed as investors braced for central bank policy meetings in the United States and Japan later this week," Agarwal said.

"In later hours rally pushed the markets higher. Both Nifty and Sensex ended over one percent. Maruti result helped auto sector to go up."

Nitasha Shankar, senior vice president for research with YES Securities, cited
that banking index resumed its upward trend. It gained two percent due to buying in private sector banks.

"Broader markets, though ended in the green underperformed the headline indices," Shankar noted.

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

Data with stock exchanges showed that FIIs bought stocks worth Rs.512.22 crore, while the DIIs invested Rs.21.21 crore.

Sector-wise, all 19 industry indices of the BSE ended in the green.

Healthy buying was witnessed in banking, automobile, metal, healthcare and information technology (IT) stocks.

The S&P BSE banking index gained 383.14 points, followed by the automobile index, which rose by 290.26 points, metal index edged higher by 156.85 points, healthcare index increased by 146.05 points and the IT index was up by 128.73 points.

Major Sensex gainers during Tuesday's trade were Maruti Suzuki, up 3.62 percent at Rs.3,869.45; Tata Steel, up 3.12 percent at Rs.358.40; Cipla, up 2.75 percent at Rs.540.35; BHEL, up 2.66 percent at Rs.129.10; and Lupin, up 2.30 percent at Rs.1,577.30.

Major Sensex losers during the day's trade were Adani Ports, down 1.21 percent at Rs.229.10 and Hero MotoCorp, down 1.19 percent at Rs.2,932.10.