Hopes of ECB extending stimulus buoys markets; Sensex gains 183 points (Roundup)

Hopes of the continuation of a stimulus package in Europe and China coupled with lower chances of a US rate hike buoyed Indian equity markets and led a barometer index to gain 183 points on Friday.

Initially, both the bellwether indices of the Indian equity markets opened higher in line with their Asian peers.

Hopes of the European Central Bank (ECB) extending its bond buying programme and China increasing its stimulus measures cheered investors globally.

The investors' confidence was restored as the ECB did not hike interest rates during its monetary policy meet on Thursday.

ECB President Mario Draghi said that rate cuts are being considered to stimulate the euro zone economy.

After the ECB meet, equity market participants here have gathered that the US Federal Reserve will refrain from raising interest rates during its monetary policy meet next week.

However, both the bellwether indices ceded their initial gains as investors were seen reluctant to chase higher prices due to anxiety over the ongoing results season.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the day's trade. It ended the day's trade higher by 44 points or 0.53 percent at 8,295.45 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange, which opened at 27,466.64 points, closed at 27,470.81 points -- 183.15 points or 0.67 percent higher from its previous close at 27,287.66 points.

The Sensex touched a high of 27,555.06 points and a low of 27,421.71 points during the intra-day trade.

The barometer index closed 19.17 points or 0.07 percent lower on Wednesday, the previous trading session. The Indian equity markets were closed on Thursday on account of Vijayadashami.

Market observers' cited that investors' sentiments were upbeat after the ECB gave hints during its monetary policy meet on Thursday that it might extend its stimulus and bond buying programme.

"The markets got a boost from yesterday's ECB decision to keep interest rates intact. The ECB also gave hints about extending its stimulus package, this buoyed investors sentiments," Alex Mathews, head of research with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agrawal, vice president, research, Angel Broking, told IANS that positive openings are expected for the Indian equity markets on Monday, on account of China's interest rate cut. The rate cut announcement was made after market hours here.

"However, we can see some profit booking at higher levels. Volatility is expected to increase next week on account of the US FOMC (Federal Open Market Committee) meet and the upcoming F&O (futures and options) expiry," Agrawal added.

The Indian rupee too gained strength in the day's trade. It ended higher by 30 paise at 64.83 to a US dollar from its previous close of 65.13 to a greenback.

The domestic institutional investors (DIIs) were net sellers in the day's trade, whereas the foreign institutional investors (FIIs) were net buyers.

According to data with stock exchanges, the DIIs sold stocks worth Rs.155.89 crore, while the FIIs picked up stocks worth Rs.229.18 crore.

Nitasha Shankar, vice president, research, with YES Securities, told IANS: "Bank index remained strong throughout the day outperforming other major indices. Banking, FMCG (fast moving consumer goods) and pharma stocks led the markets higher while telecom, tech and auto stocks witnessed profit booking."

Sector-wise, S&P BSE capital goods index plunged by 247.46 points, automobile index receded by 135.09 points and technology, entertainment and media (TECK) plummeted by 24.86 points.

The S&P BSE banking index surged by 263.27 points, FMCG index augmented by 87.10 points, oil and gas index gained by 75.12 points, healthcare index edged higher by 66.99 points and information technology (IT) index rose by 40.54 points.

Major Sensex gainers during Friday's trade were ITC, up 2.81 percent at Rs.358.30; Axis Bank, up 2.81 percent at Rs.525.70; Gail, up 2.11 percent at Rs.326; NTPC, up 1.92 percent at Rs.132.40 and HDFC, up 1.90 percent at Rs.1,340.85.

The major Sensex losers were Bharti Airtel, down 3.42 percent at Rs.358.75; Vedanta, down 2.67 percent at Rs.102.25; Larsen and Toubro (L&T), down 2.58 percent at Rs.1,510.30; Maruti Suzuki, down 2.05 percent at Rs.4,381.45 and Wipro, down 1.68 percent at Rs.568.20.