Short-covering slightly buoys equity markets

Mumbai, Jan 25 (IANS) Positive global indices, coupled with firm crude oil prices and a stable rupee, supported the upward movement of the Indian equity markets during a volatile mid-afternoon trade session on Monday.

Consequently, a barometer index of the Indian equity markets gained 40 points.
Initially, both the bellwether indices opened on a positive note in sync with their Asian peers. Even the firm closing of the domestic and the US markets last week supported the upward trajectory.
Moreover, the short-covering rally was supported by firm oil prices and a stable rupee value.
Further, expectations of an additional stimulus from the ECB (European Central Bank) by March this year boosted investors confidence.
However, gains were capped by profit bookings and caution over the upcoming rate setting meeting of the FOMC (Federal Open Market Committee) scheduled for January 27-28.
The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE) gained 40 points or 0.16 percent.
In contrast, the wider 50-scrip Nifty of the National Stock Exchange (NSE) was trading flat. It inched up by 7.00 points or 0.09 percent to 7,429.30 points.
The S&P BSE Sensex, which opened at 24,540.97 points, was trading at 24,475.27 points (1.55 p.m.), up 39.61 points or 0.16 percent from the previous day’s close at 24,435.66 points.
The Sensex touched a high of 24,650.57 points and a low of 24,450.81 points in the intra-day trade.
The S&P BSE market breadth favoured the bulls — with 1,693 advances and only 793 declines.
“Firm closing from last week and positive Asian markets today supported the Indian markets gains. Even the positive sentiments eminating out of last week’s Chinese macro-data and ECB’s announcements restored the risk taking appetite of investors,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
“Rupee and oil, both being on a firm note have boosted sentiments.”
Nitasha Shankar, vice president for research with YES Securities, cited that the Indian markets were trading with a positive bias, taking cues from their global peers.
“Further, broader markets are outperforming at the moment as high beta stocks are witnessing buying momentum,” Shankar noted.
“Banking stocks continue to see short covering rally. Barring the FMCG (fast moving consumer goods) index, all major indices are trading higher with decent gains. Metal, Pharma and Reality stocks are outperforming.”