MUMBAI: Across-the-board buying lifted the sensex by nearly 2% on Thursday to above the psychologically important 80K mark again. It closed slightly lower, however, at 79,944 – up 1,436 points on the day.
An absence of most foreign funds during the ensuing holiday season helped the day’s rally, market players said. Over the last three months, foreign portfolio investors have been the major sellers in the market, pulling leading indices down.
On the NSE, Nifty closed 446 points or 1.9% up at 24,189 points. The day’s rally added a little over Rs 6 lakh crore to investors’ wealth, with BSE’s market capitalisation now at Rs 458.8 lakh crore.
At the start of Thursday’s session, markets were flat but as the day progressed, the two leading indices picked up gains and closed near their intraday highs. Short covering in the later part of the session also helped the rally, brokers and analysts said.
“While markets failed to deliver a Christmas rally over the past few weeks, the new year has provided strong optimism in the first two days, with the sensex touching the psychologically important 80K mark on the back of broad-based short covering,” Prashanth Tapse, senior VP (research) at Mehta Equities, said.
Gains in banking, IT, auto and metal stocks triggered the rally too, despite concerns in the currency market. The rupee dipped to a fresh low on Thursday amid rising crude oil prices and subdued growth, Tapse wrote in a post-market note. “However, any further uptick in US bond yields could weigh on domestic equities and fuel (further) foreign fund outflows.”
In Thursday’s session, FPIs were net buyers at Rs 1,507 crore while domestic funds recorded a net buying figure of just Rs 22 crore, data from BSE showed.
Of the 30 sensex stocks, all but one closed with gains. Infosys, Reliance Industries and Bajaj Finance contributed the most to the index’s four-figure gain, BSE data showed. Only Sun Pharma closed lower.
Looking ahead, in the short run, brokers feel the gradual uptick in the market will continue. “Investors will closely track the pre-quarterly business updates to be released over the next few days for insights into the upcoming result season,” Siddhartha Khemka, head of research (wealth management) at Motilal Oswal Financial Services, said. Investors would also look for global cues as foreign markets reopen after year-end holidays, he said.
