Sensex gains over 205 points; auto stocks rise

A day after it lost over 115 points in the wake of the central bank deciding to maintain status quo on key lending rates, a barometer index of the Indian equity markets gained over 205 points during the mid-afternoon trade session on Wednesday.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading in the green. It was 63.85 points or 0.75 percent up at 8,580.75 points.

The sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 28,138.04 points, was trading at 28,277.18 points (1.45 p.m.), up 205.25 points or 0.73 percent from the previous day's close at 28,071.93 points.

The Sensex so far touched a high of 28,310.23 points and a low of 28,135.68 points in the intra-day trade.

According to analysts, bargain hunting was observed in the market after Tuesday's fall.

"There was bargain hunting. Investors were bullish about the dovish language used by the RBI which indicated higher prospects of an out-of-turn rate cut," Anand James, co-head, technical research desk, Geojit BNP Paribas, told IANS.

"The language used by the RBI on the Indian economic growth, oil prices, monsoon, inflation and the US rate hike gave positive bias to the markets."

James pointed out that the bank's announcements of changing the cap on bond investment limit from being dollar-linked to rupee-denominated, segregation of the bond market and its engagements with the government over the new financial code also boosted the markets.

"There were also positive triggers coming in from stable European and Chinese markets, falling commodity prices and healthy monsoon performance," James added.

Sector-wise, healthy buying was observed in automobile, healthcare, information technology (IT), capital goods, fast moving consumer goods (FMCG) and technology, entertainment and media (TECK) sectors.

However, the banking sector came under selling pressure.

The S&P BSE automobile index zoomed by 295.07 points, healthcare index soared by 215.01 points, IT index rose 199.59 points, capital goods index was higher by 138.35 points, FMCG index gained 121.34 points and TECK index was up 102.54 points.

However, the S&P BSE bank index was lower by 25.91 points.