Mumbai, May 30 (IANS) Short covering, along with expectations of healthy quarterly results and stable crude oil prices, pushed the Indian equity markets higher on Monday.
The key indices oscillated in a narrow range following three days of sharp up-move and made marginal gains during the mid-afternoon trade session. Buying was witnessed in automobile, metals, and information technology (IT) stocks.
The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 11.75 points or 0.14 percent, at 8,168.40 points.
The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,694.75 points, traded at 26,717.87 points (at 2.00 p.m.) -- up 64.27 points or 0.24 percent from the previous close at 26,653.60 points.
The Sensex has so far touched a high of 26,794.96 points and a low of 26,623.33 points during the intra-day trade.
The BSE market breadth was evenly poised between the bears and the bulls -- with 1,246 declines and 1,196 advances.
The key Indian indices had ended on a higher note during the previous trade session on May 27. They also touched their new six-month intra-day high levels on last Friday.
The barometer index had gained 286.92 points or 1.09 percent, while the NSE Nifty had edged up by 87 points or 1.08 percent.
The broader markets, too, gained during the intra-day trade.
Initially on Monday, the key indices opened on a higher note, as extended buying was witnessed after last four sessions of healthy gains.
Besides, flat-to-positive Asian markets, short covering, stable crude oil prices and expectations of improved fourth quarter earnings aided the benchmarks to rise.
However, gains were capped due to weak rupee and hawkish comments from the US Federal Reserve on a possible June rate hike.
The US Fed Chairperson Janet Yellen last Friday hinted towards a possible June rate hike. A hike in the US interest rates is expected to lead away Foreign Portfolio Investors (FPIs) from emerging markets such as India.
In addition, caution prevailed ahead of the upcoming release of the major macro-economic data like the fourth quarter GDP (gross domestic product), eight core industries (ECI) and the PMI (purchasing managers index).
These key data points can give further cues towards a rate decision by the Reserve Bank of India (RBI) in its monetary policy meet scheduled on June 7.
"Last week's rally prompted extended buying which supported prices. Mixed-to-positive Asian markets and short covering, too, aided in the upward movement," Anand James, chief market strategist at Geojit BNP Paribas Financial Services, told IANS.
According to Dhruv Desai, director and chief operating officer of Tradebulls, markets consolidated after three days of rally.
"The market base, which was placed at 7,800 points a week back, has now shifted upward to 8,000 points," making it the new support level for the market, Desai said.
"Global markets appear to be well-prepared for a summer interest rate hike by the US Fed after comments by Federal Reserve Chair Janet Yellen enhanced the prospects of a near-term US interest rate hike."
Nitasha Shankar, senior vice president for research with YES Securities, pointed out that broader markets marginally outperformed the headline indices.
"A sudden spike in VIX (volatility index) in trade today suggests volatile sessions can be witnessed," Shankar said.
"IT, metals and bank indices are trading in the green with handsome gains, while pharma, realty and FMCG indices are trading in the red."
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