Sensex recovers to end 31 pts higher; banking and pharma gain
Mumbai: In volatile trade, the BSE benchmark Sensex Tuesday recovered from its biggest fall in 14 months to close 31 points higher at 19,722.29 on buying in banking and healthcare stocks, amid inflation easing to over 3-year low.
After a better start, the 30-share Sensex fell to the day's low of 19,652.69 as investors adopted a cautious before Wholesale Price Index (WPI) based inflation data release.
After data showed WPI inflation in April 2013 posted its first sub-5 percent reading since November 2009, rate cut hopes led buying in ONGC, HDFC, Sun Pharma, Bharti Airtel and Tata Motors which supported the recovery, traders said.
The Sensex finally ended with a gain of 30.62 points, or 0.16 percent, at 19,722.29. On Monday, it had plunged by over 430 points due to various factors including surging trade gap.
The stock market today also improved on speculators covering their pending short positions created in the previous session's steep fall, brokers said.
"We believe today's WPI inflation report provides ample room for the RBI to cut policy rates at its 17 June policy meeting," said Barclays analysts Rahul Bajoria and Siddhartha Sanyal in a research note.
In line with the general firming trend, the broad-based National Stock Exchange index Nifty rose by 14.95 points, or 0.25 percent, to 5,995.40. The MCX-SX flagship index SX40 closed 17.20 points up, or 0.15 percent, to 11,679.54 points.
Globally, Asia closed narrowly mixed. Key indices in China, Hong Kong and Japan settled lower while Singapore, South Korea and Taiwan ended higher. European indices were also trading lower in early trade.
France's CAC was down by 0.34 percent, Germany's DAX by 0.24 percent and the UK's FTSE by 0.12 percent.
Turning back to the local market, 15 scrips out of 30-share Sensex pack ended higher. Major gainers from the Sensex were Sun Pharma (2.03 percent), ONGC (1.78 percent), Bharti Airtel (1.78 percent), Gail India (1.57 percent), Tata Motors (0.96 percent), Tata Power (0.91 percent) and Hindalco Ind (0.86 percent).
However, Dr Reddy's Lab dropped by 2.66 percent, followed by Bajaj Auto (1.87 percent), Coal India (0.69 percent), M&M (0.67 percentt), BHEL (0.66 percent), and Reliance Industries (0.66 percent).
Among the sectoral indices, the S&P BSE-HC firmed up by 0.67 percent, followed by S&P BSE-Teck (0.64 percent), S&P BSE-PSU (0.48 percent) and the S&P BSE-Power (0.40 percent). S&P BSE-CD dropped by 1.16 percent and the S&P BSE-Realy by 0.38 percent.
Commenting on Nifty, Shubham Agarwal, Associate VP & Senior Technical Equities Analyst, Motilal Oswal Securities said: "Nifty saw an inside day formation after a steep fall yesterday which is a sign of temporary exhaustion. The level of 5960 has turned to be an important support point sustenance below which, index can be expected to move towards 5870."
Total market breadth remained negative as 1,194 stocks closed down while 1,140 scrips finished with gains. 132 stocks ruled steady. Total turnover dropped to Rs 1,671.47 crore from the yesterday's close of Rs 2,176.19 crore.
Foreign institutional investors (FIIs) injected Rs 244.08 crore yesterday, as per provisional data from the stock exchanges.