Mumbai, Sep 23 (IANS) Attractive valuations and bargain hunting propelled a barometer index of the Indian equities into gaining 214 points or 0.83 percent during the late afternoon trade session on Wednesday.
The gains came a day after the barometer 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) plunged 541 points or 2.07 percent at 25,651.84 points on Tuesday.
Weak European cues, dwindling rupee value coupled with anxiety over the upcoming derivatives expiry had on Tuesday eroded investors’ confidence at the Indian equity markets.
The Indian markets again came under pressure during the initial trade on Wednesday, as weak Asian cues emanating out of a below-expected Chinese PMI (purchasing managers’ index) data spooked investors.
The Asian markets fell after the release of the Chinese PMI data. Hong Kong’s Hang Seng dropped by 2.26 percent, and China’s Shanghai Composite Index tumbled by 1.69 percent. Japan’s Nikkei index was closed today.
However, attractive valuations in banking, consumer durables and information technology (IT) sectors helped the Indian markets pare initial losses.
Furthermore, value buying was observed at the wider 50-scrip Nifty of the National Stock Exchange (NSE). It gained by 50.60 points or 0.65 percent at 7,862.60 points.
The S&P BSE Sensex, which opened at 25,526.53 points, was trading at 25,865.51 points (at 2.45 p.m.), up 213.67 points or 0.83 percent from the previous day’s close at 25,651.84 points.
The Sensex touched a high of 25,934.02 points and a low of 25,386.48 points in the intra-day trade so far.
Market observers pointed out that the sharp downward corrections on Tuesday due to weak European cues have cheapened stocks and prompted value buying.
“Tuesday’s correction due to the European market sell-offs and the early morning fall today due to weak Chinese PMI data, made valuations very attractive for bargain hunting,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
“Banks, consumer durables and other sectors have led the ongoing recovery.”
Vaibhav Agrawal, vice president, research, Angel Broking, told IANS that unwinding of positions ahead of September derivative contracts expiry slated for Thursday had made the markets volatile.
“Markets continue to remain volatile ahead of the F&O (futures and options) expiry. Both benchmarks opened on a weak note led by the lower than expected Chinese PMI and negative global cues, but recovered from the lows on account of positive European markets,” Agrawal said.
In the early trade session in Europe, London’s FTSE 100 index was higher by 1.19 percent, French CAC 40 inched up by 0.80 percent and Germany’s DAX Index rose by 0.93 percent.
Sector-wise, banking, healthcare, consumer durables, capital goods and information technology (IT) stocks supported the market recovery.
Notwithstanding the positive trend, only power sector came under intense selling pressure.
The S&P BSE banking index augmented by 257.08 points, healthcare index gained by 144.27 points, consumer durables index increased by 136.45 points, capital goods index rose by 94.34 points, and IT index was higher by 80.18 points.
The S&P BSE power index fell by 3.85 points.