Sensex zooms 305 pts on value-buying, rupee recovery

Wednesday, 12 September 2018

The BSE Sensex, which opened in the green, surged in late afternoon trade to finish higher by 304.83 points at 37,717.96. The broader NSE Nifty too jumped 82.40 points to end at 11,369.90.

MUMBAI: Reversing a two-day meltdown, equity indices staged a smart pullback Wednesday as investors scooped up recently-hammered FMCG, metal and capital goods stocks amid a recovery in the rupee.

Sentiment was bolstered after the government said all steps will be taken to ensure the domestic currency does not depreciate to "unreasonable levels", amid reports that Prime Minister Narendra Modi will take stock of the economic situation over the weekend. 

The BSE Sensex, which opened in the green, surged in late afternoon trade to finish higher by 304.83 points at 37,717.96. The broader NSE Nifty too jumped 82.40 points to end at 11,369.90.

The rupee rebounded from its historic low of 72.91 (intra-day) against the dollar to 71.86 in afternoon trade, while data showed that India's exports grew by 19.21 per cent to USD 27.84 billion in August.

The rupee had closed at yet another record low of 72.69 Tuesday.

Economic Affairs Secretary Subhash Chandra Garg said the government and the RBI will do everything to ensure that the rupee does not depreciate to "unreasonable levels".

The 30-share BSE Sensex, after a positive opening at 37,546.42, advanced to the day's high of 37,752.58 on a flurry of buying by DIIs and retail investors. 

It finally settled 304.83 points, or 0.81 per cent, higher at 37,717.96. Intra-day, it also slipped into the negative zone to hit a low of 37,342.

The gauge had plunged about 977 points in the previous two sessions as global trade war tensions rattled investor optimism.

The broader NSE Nifty, in a volatile session, recaptured the key 11,300-mark. It ended at 11,369.90, up 82.40 points or 0.73 per cent. During the day, it moved between 11,380.75 and 11,250.20.

Brent crude oil prices also eased to some extent after breaching the USD 79 a barrel mark.

Buying activity picked up ahead of IIP and inflation data due later in the day as domestic investors accumulated recently-battered stocks amid a higher opening in European markets.

However, most other Asian markets extended losses for the sixth straight session as investors fear an escalation in the China-US trade conflict.

Meanwhile, domestic institutional investors (DIIs) bought shares worth Rs 749.62 crore, while foreign portfolio investors (FPIs) sold equities worth Rs 1,454.36 crore on a net basis Tuesday, provisional data showed. 

Stock exchanges will remain shut Thursday on account of 'Ganesh Chaturthi'.

"Market turned positive supported by a recovery in rupee from all time low and rebound in consumer stocks after a nosedive correction. 

"The global triggers are not very supportive as trade tension remains a key catalyst while outflow of foreign funds in expectation of Fed rate hike is impacting the domestic sentiment. Any government intervention to contain the current account deficit and measures on rupee will provide impetus to the market," said Vinod Nair, Head of Research, Geojit Financial Services.

In the Sensex pack, Power Grid stole the show by spurting 3.40 per cent after its recent hammering, followed by ITC Ltd at 3.11 per cent.

Other prominent gainers were Sun Pharma, Adani Ports, Kotak Bank, Tata Steel, Vedanta Ltd, HUL, L&T, Wipro, RIL, Infosys, Bajaj Auto, SBI, HDFC Bank, HDFC Ltd, ONGC and NTPC, rising by up to 2.98 per cent.

In contrast, Axis Bank sank 2.30 per cent, Tata Motors 1.70 per cent, Bharti Airtel 1.28 per cent and ICICI Bank 1.07 per cent.

Sector-wise, the BSE FMCG index was the biggest mover, rising 2.40 per cent, followed by metal 1.52 per cent, capital goods 1.06 per cent, healthcare 0.76 per cent, consumer durables 0.66 per cent, power 0.60 per cent, infrastructure 0.49 per cent, IT 0.46 per cent, teck 0.34 per cent and auto 0.25 per cent.

Telecom, realty and bankex ended lower, falling up to 0.76 per cent.

The broader market depicted a mixed trend, with the BSE mid-cap index gaining 0.52 per cent while the small-cap gauge ended 0.27 per cent lower. 

In the Asian region, Japan's Nikkei shed 0.27 per cent, Hong Kong's Hang Seng fell 0.28 per cent, while Shanghai Composite Index tumbled 0.33 per cent.

However, a firm trend was seen in Europe in early deals. Frankfurt's DAX rose 0.21 per cent and Paris CAC 40 advanced 0.44 per cent. London's FTSE inched up 0.08 per cent.

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