Stocks rebound but mkts to stay choppy
NEW DELHI: Markets snapped a five-day losing streak to climb more than 1% on Thursday amid positive global cues, but market observers expect volatility to continue. Benchmark indices BSE Sensex and NSE Nifty rose 1.05% and 1.02%, closing at 57,037.50 and 17,136.55 points, respectively. Asian stock markets ended mostly higher, following a stocks rally in the US markets. Taiwan, Jakarta Composite and Shanghai Composite indices closed 0.36-0.91% higher, while Nikkei & Hang Seng slipped 0.40% & 1.35%. European stock markets edged higher.
Investors were encouraged by some of the latest corporate earnings news and were buying on dips, said Deepak Jasani, head of research at HDFC Securities Ltd. According to him, Chinese and Hong Kong markets fell after the Chinese central bank kept benchmark lending rates unchanged.
“A pull-back rally in the global markets lifted sentiments as benchmark indices traded higher,” said Shrikant Chouhan, head of equity research (retail), Kotak Securities Ltd.
Companies and sectors that saw heavy selling in recent days rebounded. Shares of HDFC Bank and HDFC rose 0.84% and 2.01%, while Infosys and Tata Consultancy Services gained 1.53% and 2.35%. Auto, oil and gas, FMCG, pharma, IT, and consumer durables indices gained 1-2%, while media, metals, banking and financial services indices ended in the red. “With support from recovery in beaten-down HDFC stocks and the IT sector, the market countered yesterday’s selloff,” Vinod Nair, head of research at Geojit Financial Services, said. Current levels of volatility can be expected to continue until global uncertainties settle down and dampen FII selling, Nair added.
Indian markets are following global counterparts, which are offering mixed cues, and indications from the domestic front are not very encouraging, said Ajit Mishra, vice-president, research, Religare Broking Ltd. The spike in volatility after the declines of the last six weeks is also causing some discomfort among bulls, said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd.
However, caution prevails too. Foreign institutional investors (FIIs) are withdrawing funds in large quantities, while support from domestic institutional investors helps the market partially balance the pressure.
Foreign portfolio investors remain net sellers. Having sold ₹1.2 trillion worth of shares this year. Provisional figures suggested they sold ₹3,009.26 crore worth of equity on Wednesday. Domestic institutional investors, though, are supporting well, having bought ₹1.2 trillion of equity till 19 April.
Brent, at around $106 a barrel, is also trading stronger.
Crude oil traded higher, supported by an AP report which noted an unexpected 4.496 million barrels decline in US crude oil stocks, said Ravindra Rao, vice-president and head of commodity research at Kotak Securities Ltd. Supply risks relating to Russia and supply disruption in Libya are also supporting crude prices, he said.