BSE Sensex posts gain on value buying, higher globals markets

Mumbai: Value buying, along with higher global markets and a healthy rise in global crude oil prices, lifted the key equity indices on Monday. The markets opened on the downside prompted by news of Reserve Bank of India (RBI) Governor Raghuram Rajan formally declining a second term. However, healthy buying in automobile, IT (information technology) and capital goods stocks helped pare initial losses. The wider 51-scrip Nifty of the National Stock Exchange (NSE) edged up by 66.15 points or 0.81 per cent, at 8,236.35 points. The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 26,497.11 points, traded at 26,838.33 points (at 3.00 p.m.) -- up 212.42 points or 0.80 per cent from the previous close at 26,625.91 points. The Sensex has so far touched a high of 26,874.28 points and a low of 26,447.88 points during the intra-day trade. The BSE market breadth was tilted in favour of the bulls -- with 1,355 advances and 1,155 declines. Both the key Indian indices ended in the green on Friday, following positive global cues and value buying. The barometer index had surged by 100.45 points or 0.38 per cent, while the NSE Nifty had risen by 29.45 points or 0.36 per cent. Initially on Monday, the equity markets opened on a flat-to-negative note, as RBI Governor Rajan declined a second term and major upcoming global event risks such as referendum in Britain on whether or not to stay as a part of the European Union (EU). Further, investors were concerned about the US Federal Reserve Chairwoman Janet Yellen's testimony to the US Congress. However, value buying after the initial downside lifted prices. Besides, higher Asian and European markets buoyed domestic key indices. In addition, an appreciation in rupee's value after it fell to a low of 67.70 restored investors' risk taking appetite. The Indian rupee opened on a weak note as investors reacted to the news on Rajan's exit. It touched a low of 67.70 against a US dollar, but sales by exporters and sovereign intervention pushed it back below 67.40 levels on spot.  "Value buying after a lower opening helped markets recover. The lower opening was prompted by news of RBI Governor Rajan not seeking a second term," Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services, told IANS.  "Even the healthy rise in Asian stocks, higher global crude oil prices and a strengthening rupee too pushed up prices at the key indices." According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, Nifty gained around one percent on the back of good buying sentiment which was supported by positive European markets.  "IT and pharma sector stocks traded firm on continuous buying support, while banking stocks also traded with sideways to firm sentiments," Desai said. "Profit booking at higher levels may restrict the upside before the end of trading hours."