Despite firming up of inflationary trends and subdued exports, the recovery rally in the Indian equity markets continued on Tuesday, with a barometer index gaining 92 points or 0.36 percent during the late-afternoon session.
Value buying, strengthening rupee and recent reform announcements restored investor confidence and supported the recovery rally which started on Monday.
The positive cues dispelled negative bias that had set in on account of hardening of inflation trend in October and subdued exports performance.
In addition, international volatility after Paris terror attacks, electoral setback for the central government in Bihar and heightened chance of a US rate hike had dented buying sentiments during the recent trading sessions.
Nevertheless, attractive stock prices, recent reforms to hike foreign direct investment (FDI) limits in various sectors and hopes on goods and services tax (GST) bill getting passed during the upcoming winter session of parliament brought back investors.
Initially, both the bellwether indices opened higher in sync with their Asian peers and in line with positive close for both the US and European exchanges on Monday.
On Tuesday, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the late-afternoon session. It was higher by 24.90 points or 0.32 percent at 7,831.50 points.
Similarly, the barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) too rose during the session under review.
The S&P BSE Sensex, which opened at 25,897.88 points, was trading at 25,851.62 points (3.00 p.m.), up 91.52 points or 0.36 percent from the previous day's close at 25,760.10 points.
The Sensex touched a high of 25,948.20 points and a low of 25,732.79 points in the trade so far.
Market observers said that value buying coupled with positive global indices and recent reforms measures supported the recovery rally.
"The recovery rally continued on the back of value buying due to attractive prices. Recent reform measures like hiking the FDI limits and positive global markets too supported the rally," Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"However, investors were cautious ahead of the release of FOMC (Federal Open Market Committee) minutes of the October meeting. The minutes are scheduled to be released on November 19," James said.
The October meeting minutes of FOMC will give further cues on whether or not the US Fed will raise interest rates in December.
