Value buying buoys equity markets

Mumbai, July 20 (IANS) Value buying, along with healthy inflow of foreign funds lifted the Indian equity markets on Wednesday, even as profit booking and upcoming global event risks flared volatility throughout the day's trade.

Consequently, the key indices closed in the green, as healthy buying was witnessed in healthcare, oil and gas, and capital goods stocks.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 37.30 points or 0.44 per cent to 8,565.85 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 27,775.70 points, closed at 27,915.89 points -- up 128.27 points or 0.46 per cent from the previous close at 27,787.62 points.

It touched a high of 27,935.18 points and a low of 27,759.71 points during the intra-day trade.

The BSE market breadth was tilted in favour of the bulls -- with 1,663 advances and 1,037 declines.

On Tuesday, the benchmark indices closed on a flat-to-positive note, even as profit booking, disappointing quarterly results and negative global cues kept the equity markets subdued throughout the day's trade.

The barometer index had closed higher by 40.96 points or 0.15 per cent, while the Nifty inched up by 19.85 points, or 0.23 per cent.

Initially on Wednesday, the benchmark indices opened on a flat-to-negative note, in sync with their Asian peers, especially the Japanese markets.

The equity markets were depressed by sector specific profit booking, disappointing quarterly results, weak rupee and lower crude oil prices.

In the day's trade, the Indian rupee weakened by nine paise to 67.20 against a US dollar from its previous close of 67.11 to a greenback.

Besides, reduced chances of further monetary policy easing by the European Central Bank (ECB) in its upcoming monetary policy review dampened investors' sentiments.

Further, volatility was flared a day after the International Monetary Fund (IMF) lowered India's growth forecast to 7.4 per cent for 2016 and 2017, from the 7.5 per cent in April, due to sluggish recovery in private investment, even as it blamed Brexit for provoking global economic uncertainty.

However, after a range-bound movement, the key indices rose on the back of value buying, recovery in global markets and healthy progress of monsoon season.

In addition, investors' hoped that the GST (Goods and Services Tax) bill will get passed in the monsoon session. This supported prices at the lower levels.

"Value buying and recovery in the global indices pushed up the prices in the day's trade," Anand James, Chief Market Strategist at Geojit BNP Paribas Financial Services, told IANS.

"However, sector specific profit booking, weak rupee, lower crude oil prices and IMF's lowering of the country's growth rate dampened investors' sentiments. Caution also prevailed due to the upcoming ECB's monetary policy meet."

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty traded on a firm note during the intra-day session due to strong buying support.

"It managed to sustain gains throughout the session. IT sector stocks witnessed volatility and recovered well from lower levels in the second half of the session," Desai noted.

"Pharma sector stocks traded firm on strong buying support. Most sugar and aviation sector stocks traded firm on buying sentiments."

In terms of investments, provisional data with the exchanges showed that foreign institutional investors (FIIs) bought stocks worth Rs 215.21 crore, while the domestic institutional investors (DIIs) divested scrip worth Rs 45.45 crore.

Sector-wise, the S&P BSE healthcare index augmented by 381.70 points, followed by the oil and gas index, which surged by 158.54 points, and the capital goods index rose by 88.22 points.

On the other hand, the S&P BSE consumer durables index fell by 28.88 points, and the telecom index dipped by 1.13 points.

Major Sensex gainers during Wednesday's trade were: Coal India, up 3.23 per cent at Rs 329.25; Dr Reddy's Lab, up 2.74 per cent at Rs 3,679.30; Gail, up 2.48 per cent at Rs 394.85; Cipla, up 2.39 per cent at Rs 517.80; and Sun Pharmaceuticals, up 1.89 per cent at Rs 797.

Major Sensex losers were: Wipro, down 1.97 per cent at Rs 538.60; Axis Bank, down 0.98 per cent at Rs 558.45; Tata Motors, down 0.87 per cent at Rs 493.80; ICICI Bank, down 0.58 per cent at Rs 267.60; and Maruti Suzuki, down 0.50 per cent at Rs 4,464.