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Markets opened on a positive note albeit with a bit of caution on concerns elevated money-market rates in China will worsen the economic slowdown in Asia’s biggest economy and exacerbate growth concerns in the region.
Short covering was witnessed in metal and mining shares after benchmark indices dropped to near 2-year lows yesterday.
At 9:25AM, the 30-share Sensex rose 52 points at 18,592 and the 50-share Nifty gained 16 points at 5,605 levels.
Meanwhile, the NSE's volatility index, or India VIX, rose 10.4 percent to 21.01, its highest close since June 25, 2012 reflecting the rising volatility in options ahead of the expiry of June derivative contracts on Thursday.
Global investor sentiments, however, remained edgy after Federal Reserve Chairman Ben Bernanke hinted towards tapering off the bond-buying programme popularly known as ‘quantitative easing’ sooner-than-expected once US economy shows sustainable signs of recovery.
The Fed may trim its monthly bond purchases by $20 billion to $65 billion in September, a Bloomberg survey showed.
China’s stocks fell, deepening their slump into a bear market on liquidity concerns.
Mirroring the concerns, Asian stocks traded lower with Nikkei falling 0.4% to 13,002, Singapore Straits Times gained 0.3% to 3,084, Hong Kong’s Hang Seng declined 1% to 19,604 while China’s Shanghai Composite index was down 2.9% at 1,908.
Back home, all the key sectoral losers included autos, consumer durables while metal, oil & gas, PSU, power rose on the BSE.
The gainers included counters such as Sterlite and Hindalco Industries rising over 1%, Bharti Airtel gained 1.4%, ONGC added 1% while Sun Pharma rose 0.8% on the BSE.
The laggards were Wipro and TCS falling 1% and 0.2% respectively, ICICI Bank and SBI was down 1% and 0.5% while Tata Power fell 0.4% on the BSE.
The broader markets traded mixed with mid-caps down 0.02% and small-caps gaining 0.2 per cent on the BSE.
The market breadth was positive. Out of 756 stocks traded so far, 435 stocks rose while 298 declined on the BSE.
