Strong Europe markets, derivatives boost Sensex

Written by Markets Bureau | Mumbai, Jun 17 | Updated: Jun 18 2008, 06:00am hrs
Taking positive cues from the European markets and continued short-covering in the derivatives segment, in the last two days, the Sensex gained over 500 points. On Tuesday too, the 30-share Bombay Stock Exchange (BSE) Sensex gained 301.08 points or 1.96%, before finally closing the day at 15,606.90 points. The broader S&P CNX Nifty of the National Stock Exchange (NSE), settled at 4,653 points, gaining 80.50 points or 1.76%. On Monday, the Sensex had gained 206.20 points, before closing at 15,395.82 points.

Dealers commented that the stronger-than-expected advance tax numbers from the banks and some short- coverings in derivatives, at the fag end of the session, in the wake of a strong opening by European markets boosted market sentiment.

The Sensex opened the day almost flat at 15,388.36 points, touched a high of 15,732.75 points, stooped to low of 15,357.98 points, before finally ending the day with 15,606.90 points.

For the second consecutive day, the purchase of shares from the banking sector saw the BSE Bankex gaining 311.54 points or 4.29%, and the BSE Realty index gain 228.32 points or 3.89%. Among sectoral indices, those of the BSE ended the day on a positive note.

Arpit Agarwal, head, research, Arihant Capital Markets, said, "We saw some unexpected effects in the markets. There were reports that the advance tax figures were better then expected. So, we saw a rise in stocks of the bank sector. There was a strong buying trend in stocks like ICICI Bank and SBI along with some short-covering in the derivatives segment. The strong buying trend was also witnessed in realty stocks."

Analysts also pointed out to the strong buying from FIIs after many days, as indicated by provisional data released by the stock exchanges (SEs) which showed that FIIs were net buyers to the tune of Rs 142 crore. "In the past few days, we saw FIIs remaining net sellers. But today we saw FIIs engaged in heavy buying, which is a good sign for the markets," added Agarwal.

However, certain sections of the market felt the markets might see a sustained positive trend provided there are some signs of stability in global crude oil prices. As the buying trend was seen across the board, the market breadth continued to remain robustly positive for the second day in row with 1,802 stocks advancing, 882 stocks losing ground and 80 remaining unchanged. Among the 30 Sensex constituents, 26 advanced, while four ended in the red.