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Sensex gets its mojo back, rebounds 171 points


Mumbai: Shaking off the bear grip of the last two sessions, the benchmark BSE Sensex came back to life today when it closed over 171 points higher powered by recently beaten-down stocks amid a higher opening in European markets.

The gains were across the board following value buying by participants.

Brokers said covering-up of short positions ahead of the September derivatives expiry slated for tomorrow lent a hand.

Rate-sensitives such as banking and realty stocks took the recovery forward, underlined by renewed hopes of a rate cut by the Reserve Bank of India at its upcoming policy review later this month.

Some of the shares hit hard in the past two sessions managed to register solid gains, which propped up the recovery.

The 30-share Sensex ended at 25,822.99, a gain of 171.15 or 0.67 per cent.

The gauge had lost 567.07 points in the previous two sessions after ADB lowered India’s growth forecast and sell-off in Europe amid lingering growth concerns.

The 50-share NSE Nifty bounced back to hit a high of 7,882.90 on value-based buying in blue-chips and finally settled higher 33.95 points, or 0.43 per cent, at 7,845.95.

Despite the turnaround, sentiment remained fragile as other Asian markets stared at their biggest single-day fall in a month after a private survey showed China’s factory activity shrank for the seventh straight month to its weakest level in 6-1/2 years.

Sentiment took on some shine after Economic Affairs Secretary Shaktikanta Das said the Reserve Bank will soon come out with a draft paper on relaxing external commercial borrowing (ECB) norms to attract overseas investments.

Optimism in Europe and a gain in commodities spurred a rebound in the region after stocks saw their worst decline in a month, which too influenced mood here.

The big gainers were Lupin, Vedanta, HDFC Bank and M&M. In the sectoral space, consumer durables gained the most surging 1.70 per cent, followed by banking, realty and oil & gas.

Of the 30 Sensex components, 19 advanced.

The broader markets too got back into a better shape on buying by retail investors. The BSE small-cap and mid-cap indices surged 0.71 per cent and 0.47 per cent, respectively.

Foreign portfolio investors (FPIs) net sold shares worth Rs 1,052.24 crore yesterday, provisional data showed. Most European indices ruled firm in early trade.

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