Short-coverings, global cues slightly buoy markets (Roundup)

Renewed buying by foreign investors, coupled with positive European indices and short-coverings, lent a fillip to the Indian equity markets on Friday.

Markets rose during the last hour of trade amidst value-buying and short-coverings which were triggered on hopes of positive budgetary announcements.

Nevertheless, profit-booking, negative Asian indices and a weak rupee capped gains and halted market attempts to rise during most of the day's trade.

Consequently, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day's trade on a flat-to-positive note -- up barely 60 points or 0.25 percent.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) ended the day's trade mildly in the green. It inched up by 19 points, or 0.26 percent, at 7210.75 points.

The Sensex, which opened at 23,640.32 points, closed at 23,709.15 points -- up 59.93 points or 0.25 percent from the previous day's close at 23,649.22 points.

During the intra-day trade, the Sensex touched a high of 23,774.48 points and a low of 23,508.36 points.

The BSE market breadth ended flat. It slightly favoured the bulls -- with 1,271 advances and 1,234 declines.

Initially, both the indices of the Indian equity markets opened on a negative note in sync with their Asian peers and Thursday's losses in the US markets.

Besides, softening of crude oil prices, which hovered around $30 a barrel (one barrel is equal to 159 litres) from Thursday's $32 a barrel-mark, held back investors from chasing stock prices higher.

In addition, a weak rupee kept investors unnerved. The rupee had closed unchanged from its previous close of 68.47 to a greenback on Thursday.

Though the currency markets were closed on Friday, investors feared that an "over-valued rupee" will come under pressure from February 22 onwards.

In the past two trading sessions, the Sensex has risen by 457 points, while the Nifty has gained 144 points.

However, profit-booking on the back of last two sessions' rise also dragged the markets lower.

But despite the downturn, investors were hopeful regarding the upcoming budgetary announcements and expected banking sector reforms.

Market participants are hopeful that the central government may increase expenditure, announce tax concessions and pave the way to reduce the NPAs (non-performing assets) levels of the banking sector.

Even the initial positive comments on the negotiations between Britain and the European Union (EU) over the continuation of the isle nation in the economic grouping cheered investors.

Moreover, short-coverings and renewed buying interest by the foreign portfolio investors (FPIs) lent a positive fillip to the equity markets.

Both foreign and domestic institutional investors (FIIs and DIIs) were net buyers on Thursday.

The data with stock exchanges for Thursday showed that FIIs invested Rs.418.64 crore, while the DIIs' bought stocks worth Rs.712.12 crore.

"The rise towards the end of the day's trade was ridden on the back of expectations from the upcoming Union Budget and on reduced chances of a Brexit. The plan to create a bank to deal with PSU's NPAs also supported the recovery rally," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

"Earlier in the day's trade profit-booking, negative global cues and softening of crude oil prices had restrained investors from chasing prices higher."

Vaibhav Agarwal, vice president and research head at Angel Broking, pointed out that markets recovered from the lows and closed on a flat note on the back of mixed global cues.

"The broader markets too remained flat with an advance decline ratio of 1:1 on the BSE. Investors will watch out for US inflation data to be released over the weekend for further cues on the Fed rate hike," Agarwal cited.

"We expect markets to continue to react to global cues as the expectations from the budgets aren't high."

Sector-wise, the BSE automobile index augmented by 143.07 points, banking index appreciated by 53.19 points and IT (information technology) index edged up by 42.70 points.

On the other hand, oil and gas index depreciated by 85.62 points, energy index was lower by 18.75 points and energy index dipped by 13.58 points.

Major Sensex gainers during Friday's trade were State Bank of India (SBI), up 3.20 percent at Rs.164.65; Hero MotoCorp, up 3.20 percent at Rs.2,704.85; Asian Paints, up 2.17 percent at Rs.854.10; Bajaj Auto, up 2.14 percent at Rs.2,457; and Mahindra and Mahindra (M&M), up 1.66 percent at Rs.1,230.75.

Major Sensex losers during the day's trade were Maruti Suzuki, down 2.02 percent at Rs.3,581.05; BHEL, down 1.83 percent at Rs.101.90; Coal India, down 1.50 percent at Rs.312.55; Axis Bank, down 1.37 percent at Rs.392.50; and Dr.Reddy's Lab, down 1.06 percent at Rs.3,062.10.