Short-covering buoys markets, Sensex gains 31 points

Short-coverings, coupled with hopes for monetary easing by the Reserve Bank of India (RBI) buoyed Indian equity markets on Friday.

This led to a barometer index of the Indian equity markets to provisionally close the day's trade on a flat note with a gain of a mere 31 points.

Initially, both the bellwether indices of the Indian equity markets opened in the red, due to lack of participation coupled with disappointing macro data that prompted some investors to book profits at lower levels.

Besides, investors were seen cautious regarding the upcoming macro data of purchasing mangers' index (PMI) slated to be released on Monday and the third-quarter earnings season which starts from January 14.

However, bellwether indices soon pared their losses on the back of short-coverings and hopes that the RBI will reduce key lending rates after Thursday's disappointing macro data points.

Even the expectations that Nifty would breach the 8,000-level mark and minor value buying at the lower levels pushed up prices.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) gained 31 points, or 0.12 percent.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) ended flat. It marginally rose 12.05 points, or 0.15 percent, at 7,958.40 points.

The Sensex of the S&P BSE, which opened at 26,101.50 points, provisionally closed at 26,148.60 points (at 3.30 p.m.) - up a paltry 31.06 points or 0.12 percent from the previous day's close at 26,117.54 points.

The Sensex touched a high of 26,197.27 points and a low of 26,008.20 points in intra-day trade.

The Sensex closed the previous session on December 31, up 158 points, or 0.61 percent, while the Nifty was higher by 50 points, or 0.63 percent.