The benchmark rises 60 points to close at 17,460; touches intra-day high of 17,560.
Short-covering in real estate and banking stocks saw domestic equity markets close on a positive note on Tuesday. Interest rate-sensitive stocks were buoyed by the Reserve Bank of India’s (RBI’s) move to raise key interest rates by 25 basis points, as against the general expectation of a 50-basis-point rise.
The 30-share benchmark Sensex of the Bombay Stock Exchange (BSE) rose 60 points, or 0.34 per cent, to close at 17,460. During the day, it touched a high of 17,560.
Yesterday, the index slipped 190 points due to nervousness in the global markets after news of Goldman Sachs’ involvement in a corporate fraud.
The broader index S&P CNX Nifty of the National Stock Exchange rose 28.3 points, or 0.54 per cent, after a 58-point fall yesterday. It closed at 5,230.
The market breadth was positive, with 2,088 stocks (70 per cent) rising and 785 falling.
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According to provisional figures, foreign institutional investors (FIIs) continued to be net sellers in the cash segment for the second consecutive day. They sold stocks worth nearly Rs 157 crore, while domestic institutional investors made net purchases of over Rs 101 crore.
“Selling by FIIs in the past few days was not unusual given that markets had run up sharply. It is likely that expiry of Nifty futures may take place around 5,200. The markets may not witness any weakness till the result season is on,” said Ajay Pandey, associate vice-president (equity) at Intime Spectrum Securities. Pandey said after the earnings season, the focus would shift to monsoon.
The repo rate now stands at 5.25 per cent, the reverse repo rate at 3.75 per cent while cash reserve ratio (CRR) is 6 per cent. According to experts, RBI may hike these further in future.
Sonal Verma, an economist at Nomura Securities, said, “We expect an inter-meeting hike in June. In all, we expect a 100-basis-point repo, reverse repo and CRR hikes between now and March 2011.”
The central bank expects the economy to grow 8 per cent during 2010-11.
| RIDING HIGH | |
| TOP SECTORAL GAINERS | |
| BSE Index | % rise |
| Realty | 3.08 |
| Bankex | 1.53 |
| PSU | 1.48 |
| Auto | 1.20 |
| TOP SENSEX GAINERS | |
| Stocks | % rise |
| SBI | 3.26 |
| DLF | 3.18 |
| Tata Motors | 2.13 |
Earning optimism and reassessment of potential damage from fraud charges against Goldman Sachs resulted in a rise in the US markets on Monday. The Goldman share price recovered following news of a split decision of the Securities Exchange Commission on pressing fraud charges against the investment bank. The Dow Jones rose 0.67 per cent. The S&P 500 gained 0.45 per cent, while the tech-heavy Nasdaq fell 0.05 per cent on Monday. Dow futures rose 34 points before the markets opened for trading on Tuesday.
European stocks also rose on Tuesday, as sentiments were boosted by positive global earnings. Another large US bank, Citi Group, is said to have posted best quarterly results since 2007. The key benchmark indices in the UK, France and Germany rose 0.81-1.27 per cent.
In Asia, key equity benchmarks in Hong Kong, Indonesia, South Korea, Singapore and Taiwan rose 0.59-1.31 per cent.