Domestic stock indices in India yesterday could not carry forward the initial momentum and showed volatility as both Sensex and Nifty moved in a range before signing off on a higher note. The markets looked for direction, but there were no major triggers at hand. Unabated buying by domestic institutional investors and a positive trend overseas offered some relief.
Trading was marked by a streak of caution after the BSE moved ahead to ‘compulsorily’ delist 200 firms this week and bar their promoters from the markets for 10 years as trading in these shares has remained suspended for over a decade.
Participants also kept track of the annual Jackson Hole Economic Policy Symposium in Wyoming, scheduled for later this week. Central bankers of more than 40 countries will attend the annual gathering, which is keenly followed for policy cues.
The Sensex settled up 33 points, or 0.11%, at 31,291.85. The 30-share gauge had lost 536.61 points in the past two sessions, mostly dragged down by over 15% plunge in the Infosys stock after Vishal Sikka’s surprise resignation as CEO last Friday amid foreign capital outflows.
The NSE Nifty reclaimed the 9,800 mark, but gave up part of the gains due to profit-booking before ending at 9,765.55, up 11.20 points, or 0.11%.
“Domestic indices couldn’t sustain the momentum from a positive opening and exhibited volatility against the backdrop of the BSE putting a noose around the neck of 200 companies by announcing compulsory delisting from today,” said Anand James, chief market strategist, Geojit Financial Services.
The move comes at a time when authorities are clamping down on shell companies for allegedly being used as conduits for illicit fund flows.
India’s second-largest IT exporter, Infosys, which had been in decline for two straight days, is back in the green by rising 0.42% to Rs877.15 on value-buying. HCL Infosystems ended with 9.5% gains after the company said it will distribute Apple products, including the iPhone, in the Indian market.
Pharma stocks led by Dr Reddy’s were back in demand after the company said it has out-licensed future development, manufacturing and commercialisation of rights of its topical high potency steroid DFD-06 to Encore Dermatology.
Domestic institutional investors (DIIs) net bought shares worth Rs474.72 crore. But the worry was foreign portfolio investors (FPIs) who net sold shares worth Rs1,983.39 crore on Monday, according to provisional data.
Meanwhile the rupee yesterday closed marginally higher against the US dollar tracking gains in Asian currencies markets. Trades were thin as public sectors banks were on strike.
The rupee closed at 64.11 a dollar, up 0.05% from its Monday’s close of 64.14. The rupee opened at 64.09 a dollar and touched a high and a low of 64.05 and 64.14 respectively.
The 10-year bond yield closed at 6.535%, compared to its previous close of 6.51%. Bond yields and prices move in opposite directions.
So far this year, the rupee gained 5.90%, while foreign institutional investors (FIIs) bought $7.35bn and $19.06bn in equity and debt markets, respectively.
Asian currencies were trading higher. South Korean won was up 0.46%, Philippines peso 0.39%, Taiwan dollar 0.14%, Malaysian ringgit 0.11%, Indonesian rupiah 0.05%, China renminbi 0.04%.
However, Japanese yen was down 0.4%, Singapore dollar 0.15%.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 93.525, up 0.47% from its previous close of 93.095.
The rupee closed at 64.11 a dollar yesterday, up 0.05% from its previous close
