Sensex, Nifty clock last hour recovery; banking, auto stocks lead gains
The Sensex and Nifty staged a comeback in the last hour of trade amid rising crude oil prices and a falling rupee. The rupee fell 6 paise to 72.69 level to the dollar today against yesterday's fall of 43 paise to 72.63 level.
Brent crude oil prices were trading at over four-year highs and inched closer to $82 per barrel ahead of impending US sanctions on Iran.
The effect of these negative factors was neutralised by statement from a finance ministry official, who said cutting banks' cash reserve ratio (CRR), or the amount of funds they set aside with the central bank, are among options that the Reserve Bank of India (RBI) could look at to improve liquidity in the system.
The central bank could also consider buying more bonds from the open market and open a special window for mutual funds to inject liquidity, the official told reporters, declining to be identified as the discussions were not public. Presently, the CRR is at 4 percent of banks' total deposits.
The statement infused life into banking stocks which were reeling under economic and global cues till that time since early trade.
The BSE bankex closed 1.39% or 390 points higher at 28,412 level after trading lower for the major part of trading session. Bank Nifty too rose 1.44% or 360 points to 25,330 level.
Auto stocks too gained with the BSE auto index rising 1% or 224.44 points to 22,627 level.
Banking stocks led the market higher at the end of the session. While the Sensex closed 347 points or 0.96% higher at 36,652 level, Nifty rose 100 points or 0.91% to 11,067.
Axis Bank (2.96%), HDFC Bank (2.95%) and Kotak Bank (2.88%) were the top Sensex gainers.
PowerGrid (3.07%) , YES Bank (2.83%) and Coal India (2.22%) were the top Sensex losers.
However, market breadth was negative with 1018 stocks closing higher against 1646 ending lower on the BSE.
On Monday, auto and banking indices led the fall with the BSE auto index closing 872 points lower at 22,402 points. The BSE bankex too fell 679 points to 28,022 level. The bank Nifty too slipped 2.45% or 626.55 points to 24,970 level. Auto stocks were hit by petrol and diesel prices hitting all time high on Monday.
Meanwhile, foreign portfolio investors (FPIs) sold shares worth Rs 523.94 crore on a net basis, while domestic institutional investors (DIIs) bought equities to the tune of Rs 1,527.67 crore Monday, provisional data showed.
Global stock markets turned higher on Tuesday as investors parsed the latest news in the United States trade disputes, while the price of oil continued to gain on concerns that OPEC countries would not increase production.
In Europe, France's CAC 40 gained 0.3 percent to 5,494 while London's FTSE 100 rose 0.5 percent to 7,494. Germany's DAX added 0.3 percent to 12,389. On Wall Street, futures for the Standard & Poor's 500 index and Dow Jones industrial average were both up 0.3 percent.
The Shanghai Composite Index lost 0.6 percent to 2,781.14 while Tokyo's Nikkei 225 gained 0.3 percent to 23,940.26. Markets in Hong Kong and Seoul were closed for holidays. Sydney's S&P-ASX 200 declined 1 point to 6,185.90. Benchmarks in Singapore, New Zealand and Bangkok rose while those in Malaysia and Jakarta retreated.