Sensex gains 5% in past five sessions

Investors' risk appetite improves on hopes the US central bank will not raise borrowing costs this year

The Indian market on Tuesday ended higher for a fifth consecutive trading session as investors' risk appetite improved on hopes that the US Federal Reserve will not raise borrowing costs this year. The gains, however, were limited on profit-taking following four days of gains. The benchmark Sensex rose 147.33 points, or 0.55 per cent, to 26,932.88, the highest level since August 21. The 50-share NSE Nifty gained 33.6 points, or 0.41 per cent, to 8,152.9. Both the indices have gained over five per cent in the past five sessions amid a reversal in outflows by foreign investors.

"The market is being helped by the global rally and last week's rate cut by the Reserve Bank of India, which boosted confidence," Alex Mathews, head of research at Geojit BNP Paribas Financial Services said to Bloomberg.

On Tuesday, foreign institutional investors (FIIs) bought shares worth nearly Rs 500 crore, while domestic investors sold an almost equal amount, provisional data provided by stock exchanges showed. A day earlier, when the Indian markets posted this year's second-biggest single-day rise, FIIs had bought shares worth Rs 800 crore.  FIIs had pulled out Rs 16,877 crore and Rs 6,475 crore from equities in August and September, respectively. So far this month, they have invested over Rs 1,100 crore.

Most Asian and European markets traded positive on Tuesday.

Jayant Manglik, president, retail distribution, Religare Securities, said investor sentiment was upbeat on positive global cues and statements made by the finance minister and the prime minister on economic growth and rollout of major reforms like Goods and Services Tax.

Tata Motors was the biggest gainer among index stocks, rising nearly six per cent. Other major gainers included ITC and Coal India, which gained four per cent each.  Meanwhile, BHEL declined nearly three per cent, Infosys fell two per cent, and Maruti dipped 1.3 per cent.

Unlike last year, when the stocks saw nearly one-way rally, markets this year have seen huge volatility due to global slowdown concerns and uncertainty around interest rate increase in the US. The benchmark Sensex in the initial three months of 2015 gained as much as 10 per cent and slipped 10 per cent on an year-to-date basis in August. The Sensex is almost unchanged for the year.