Key equity indices continued their northward journey on the back of strong global cues. Heavy buying across the board helped shares end on a firm note on Monday. Dealers, however, said the country’s stock markets will move in a range-bound manner for the next few days as they may see some bounce-back in crude oil prices.
The 30-share Bombay Stock Exchange (BSE) Sensex shot up 336.10 points or 2.22% at 15,503.92 and the National Stock Exchange’s (NSE) Nifty gained 90.90 or 2.01% points and closed at 4,620.40 points.
In spite of US markets posting robust closing on Friday, the Asian markets on Monday ended mixed, with Hong-Kong’s Hang Seng index closing flat, losing 25.87 points or 0.12% to close at 21,859.34 points. China’s Shanghai Composite lost 135.65 points or 5.21% before finally ending at 2,470.07 points, while Japan’s Nikkei 225 added 262.50 points or 1.99% and closed on an encouraging note at 13,430.91 points. Jakarta Composite also shed 62.01 points or 2.82% and closed below with 2,133.92 points. European markets were also trading on a positive note on Monday.
Deven Choksey, MD, KR Choksey Securities, said, “Apart from upbeat global cues, moderate to heavy rainfall across the country, the possibility of healthier IIP numbers and optimism of retail investors re-entering the market, we saw markets end on an encouraging note. As per the current situation, we may see the markets going in one direction (up) but with certain amount of volatility.”
Dealers said the softening of crude prices in the international market may have played its role in the recent run up of the markets but another important development is the short covering resorted to by participatory note (PN) holders.
PN holders are covering their short position in anticipation of certain action by the regulator on unregulated SLB outside its purview at its coming board meeting, where restrictions on FIIs to issue PNs is expected to be reviewed.
Choksey also added that the Sensex may cross the 15,900 level and can touch the 16,500-mark in the coming weeks. “But we also strongly believe that crude prices, which may now go below $110 per barrel, has the potential to bounce back to touch $127 per barrel. If we see crude again going up, then we can expect the Sensex to receed to 13,800 points,” said Choksey.
The Sensex opened the day with 15,430.51 points as US markets had closed last week with heavy gains and Asian markets were trading firm on Monday and touched a high of 15,520.71 points and low of 15,367.97 points in intra-day rally.
On the sectoral front, barring IT and consumer durables, all sectoral indices ended the day in black. The major gainers in the BSE sectoral indices were realty and banking sectors. BSE Bankex added 290.49 points or 5.27% ending the day at 5,799.37 points. The BSE Realty gained 307.32 points or 4.16% and finally closed at 7.702.35 points.
On Monday, the overall breadth of the market was positive as out of 2,776 stocks traded on BSE, 1,738 stocks closed in green while 970 stocks ended in the red while 68 stocks remained unchanged. While out of 30 Sensex stocks traded, 25 advanced and 5 declined.
As per provisional figures provided at the BSE on Monday, foreign institutional investors were net buyers at Rs 280.61 crores and domestic institutional investor were net buyers at Rs 505.30 crore. As per figures disclosed by Sebi, FIIs were net buyers at Rs 1,607 crore in August.