Positive statements on the US economy by US Federal Reserve chairman Ben Bernanke on Wednesday coupled with expectation of European central bank keeping the interest rate ?lower? lifted investor sentiments across the Asia-Pacific region. Mirroring a rally in the Asian markets, the domestic equity indices posted their second consecutive day of gain on the back of short covering in large cap stocks. The 30-share BSE Sensex climbed 264 points, or 1.59%, to end the trading session at 16,922, its highest closing this week. Similarly, the broader 50-share NSE Nifty surged 1.57% to close at 5,079 points. India’s volatility index, a measure of markets expectation of volatility over the near term dropped 5.89% to 26.50.
Overseas investors turned buyers of Indian shares on Thursday after selling Indian stocks worth Rs 900 crore in the last three trading sessions. Provisional data from the stock exchanges showed that Foreign Institutional Investors (FII) purchased Indian equities worth Rs 245 crore while the domestic institutional investors sold equities to the tune of Rs 105 crore.
The key benchmark equity indices in Asia rose with Japanese Nikkei 225 surging over 1% to come out of its six months low (reached in the previous trading session). Similarly Hang Seng rose 0.06% while Kospi and Straits Times Index gained 0.27% and 1.23% respectively.
Nifty June futures closed at a premium of 7.50 points (over the spot market) at 5,086 from the previous days discount of 10 points. ?There was considerable amount of short covering in index futures that lead to Nifty June futures closing at a premium,? said Siddarth Bhamre, derivative analyst at Angel Broking. He added that the stocks of ICICI and HDFC Bank a key constituent of Nifty was trading on an ex-dividend basis (today) and that was perhaps the reason for narrowing down of the spot-future differences.