MUMBAI: Indian equities proved their resilience once again on Tuesday. In a backdrop of global weakness, indices posted strong gains led by banking, power and capital goods shares. With the market pressured by global bearishness over the past few sessions, investors took solace in the fact that the Left might allow the UPA government to go ahead with talks with the IAEA regarding the controversial nuclear deal.
"Signs of a resolution of the deadlock between the Left and UPA boosted investor sentiment. This unexpected news also led traders to cover short positions accumulated over the past few sessions," said Viral Doshi, independent technical and derivatives strategist.
The Bombay Stock Exchange's Sensex ended up 298 points or 1.59 per cent at 19,035.48. From an early low of 18,636.21, the index rose to 19,210.48 before the close. The National Stock Exchange's Nifty closed 78 points or 1.39 per cent higher at 5695.4, touching a high of 5758.85 and low of 5591.6.
According to Doshi, there was unequal appreciation in the market today. "Buying was seen primarily in power, engineering, construction, banking and oil stocks given their huge order books and high growth potential. But sectors like FMCG, pharma and software remain out of flavour," he said. NTPC (up 7.4%), HDFC Bank (6.98%), Larsen & Toubro (4.84%), HDFC (2.98%) and State Bank of India (2.62%) were the biggest index gainers.
Non-index stocks like Chambal Fertilisers and Chemicals, Welspun Gujarat Stahl Rohren and Dredging Corporation added over 10 per cent gains. The BSE Mid-cap Index rose 2.12 per cent, while the CNX Mid-cap Index advanced 1.96 per cent backed by Syndicate Bank (9.64%), Alstom Projects (9.14%), Indian Bank (7.98%), Jet Airways (7.37%) and Bharat Electronics (7.11%).
Despite the sharp rise, Doshi finds it difficult to take a directional call as yet. "Nifty should trade in the 5400-5800 range over the next few sessions. Till there is a strong come back of foreign inflows, one cannot expect the market to move significantly higher," he added.
Looking at the surge, Doshi warned that partial gains could be wiped out tomorrow. "Investors should selectively pick up good valuation stocks. Traders, however, are advised to reduce positions and stick to strict stop losses," he said.
Elsewhere in Asia, the Nikkei ended 0.46 per cent lower, the Straits Times lost 1.02 per cent, while the Hang Seng finished 0.5 per cent higher. European shares were also weak at the time local markets closed. The FTSE, CAC and DAX were all marginally lower.
"Signs of a resolution of the deadlock between the Left and UPA boosted investor sentiment. This unexpected news also led traders to cover short positions accumulated over the past few sessions," said Viral Doshi, independent technical and derivatives strategist.
The Bombay Stock Exchange's Sensex ended up 298 points or 1.59 per cent at 19,035.48. From an early low of 18,636.21, the index rose to 19,210.48 before the close. The National Stock Exchange's Nifty closed 78 points or 1.39 per cent higher at 5695.4, touching a high of 5758.85 and low of 5591.6.
According to Doshi, there was unequal appreciation in the market today. "Buying was seen primarily in power, engineering, construction, banking and oil stocks given their huge order books and high growth potential. But sectors like FMCG, pharma and software remain out of flavour," he said. NTPC (up 7.4%), HDFC Bank (6.98%), Larsen & Toubro (4.84%), HDFC (2.98%) and State Bank of India (2.62%) were the biggest index gainers.
Non-index stocks like Chambal Fertilisers and Chemicals, Welspun Gujarat Stahl Rohren and Dredging Corporation added over 10 per cent gains. The BSE Mid-cap Index rose 2.12 per cent, while the CNX Mid-cap Index advanced 1.96 per cent backed by Syndicate Bank (9.64%), Alstom Projects (9.14%), Indian Bank (7.98%), Jet Airways (7.37%) and Bharat Electronics (7.11%).
Despite the sharp rise, Doshi finds it difficult to take a directional call as yet. "Nifty should trade in the 5400-5800 range over the next few sessions. Till there is a strong come back of foreign inflows, one cannot expect the market to move significantly higher," he added.
Looking at the surge, Doshi warned that partial gains could be wiped out tomorrow. "Investors should selectively pick up good valuation stocks. Traders, however, are advised to reduce positions and stick to strict stop losses," he said.
Elsewhere in Asia, the Nikkei ended 0.46 per cent lower, the Straits Times lost 1.02 per cent, while the Hang Seng finished 0.5 per cent higher. European shares were also weak at the time local markets closed. The FTSE, CAC and DAX were all marginally lower.
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Source: ET
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Source: ET
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