Mumbai, Feb 26 (IANS) Short-coverings, coupled with value-buying and positive Asian indices, supported the rise of the Indian equity markets during the mid-afternoon trade session on Friday.
Consequently, the barometer 30-scrip sensitive index (Sensex) of the BSE surged 185 points or 0.81 percent.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the mid-afternoon trade session. It was higher by 53.70 points, or 0.77 percent, at 7,024.30 points.
The Sensex which opened at 23,141.08 points, traded at 23,161.09 points (01:30 p.m.), up 185.09 points or 0.81 percent from the previous day’s close at 22,976 points.
So far, during the intra-day trade, the Sensex touched a high of 23,227.91 points and a low of 23,021.94 points.
In contrast, the BSE market breadth was tilted in favour of bears — with 1,298 declines and 964 advances.
Initially, the Indian equity markets opened on a positive note, on the back of bullish Asian indices and Thursday’s 1.29 percent gain at a key US bourse.
However, a weak rupee kept investors unnerved and capped gains. The rupee opened flat at 68.71 to a US dollar from its previous close of 68.71 to a greenback on Thursday.
It touched a low of 68.79 to a US dollar.
On Thursday, the rupee crashed to a fresh 30-month closing low of 68.71 to the US dollar.
Further, caution prevailed over the two-day long G20 finance ministers’ meet which began in Shanghai, China.
Besides, softening of crude oil prices to $33 a barrel, deterred investors from chasing stock prices higher.
Notwithstanding the brief downward movement, hopes of more reform announcements during the budget session swelled the equity markets.
The equity markets were buoyed by value-buying and short-covering which were triggered on hopes of positive budgetary announcements.
Market participants hoped that the central government may increase expenditure, announce tax concessions and pave the way to reduce the NPAs (non-performing assets) levels of the banking sector.
In addition, healthy growth forecast by the Economic Survey for 2015-16 tabled in parliament on Friday cheered investors.
The survey authored by Chief Economic Advisor in the Finance Ministry Arvind Subramanian said: “Despite volatility in global financial markets, the Indian equity market has been relatively resilient during this period compared to the other major emerging market economies.”
“The market has rebounded time and time again.”
It expects India to become the leading investment destination, once the global financial system settles down.
“Positive Asian markets and short-covering over positive budgetary announcements supported markets’ rise,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
“Value buying was seen after three day’s of slide. However, weak rupee and flat crude oil prices dented sentiments.”
Nitasha Shankar, vice president for research with YES Securities, pointed out that Indian markets traded with mild bullishness following three days of relentless selling.
“Moreover, most of the indices have given up their morning gains, underperforming their Asian peers suggesting sustained weakness dominant in our markets,” Shankar noted.