The markets kept an upward momentum on the back of hope that good monsoon forecasts would prompt the central bank to cut policy rates in its June review. The BSE Sensex gained about 192 points, or 0.7 per cent, to close at 27,837. The National Stock Exchange’s broader index, the Nifty, went up 58 points, or 0.69 per cent, to end at 8,423.
“The markets are slowly gaining back a bit of the ground lost since Tuesday. We have seen buying returning from the foreign investors’ side. The Nifty closing above 8,400 is a good sign for the short term,” said Hitesh Agrawal, head of research, Reliance Securities.
Foreign portfolio investors (FPIs) continued their buying activity and were net buyers at Rs 123 crore. However, they are still net sellers for the month, at Rs 5,801 crore. Domestic institutional investors (DIIs) have been net buyers of equities for all of May, at Rs 8,807 crore. On Wednesday, they bought shares worth Rs 103 crore.
Among the sectors, technology (IT)stocks, up about 1.7 per cent, led the rise. Both Wipro and Tata Consultancy Service featured among the top gainers in the Sensex for the day. Wipro was up two per cent, while TCS rose 1.8 per cent. “Mainly, buying in IT majors and select private banking counters, alongside a few index heavyweights, kept the benchmark in the green,” said Jayant Manglik, president-retail distribution, Religare Securities.
Other sectors which performed well were banking stocks, up about 0.9 per cent. HDFC and HDFC Bank were also among the top five performers in the Sensex, up 2.1 and 1.7 per cent, respectively. However, some in the market believe shares might see some pressure soon, as profit-booking by investors is likely to continue, despite recent declines.
“Short-term investors are still confused and FPIs also still seem sceptical about the reforms push by the government. With FPIs moving money to less-expensive markets, India could continue to see some more outflow of funds, but at a lower scale,” said Agrawal.
Analysts said 8,000 was a good support level for the Nifty. But any fall below that could see a sharp decline.
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