Mumbai–Short-covering, along with supportive global cues, buoyed the Indian stock exchanges on Tuesday after an initial volatile trade session, with the S&P BSE Sensex closing 190 points higher.

In addition, investors factored in the outcome of Assembly election results, although the outcome was unfavourable for the Bharatiya Janata Party (BJP). They bought on every available opportunity as valuations became attractive, market analysts said.

Initially, both the key indices — S&P BSE Sensex and NSE Nifty50 — had a gap-down opening and subsequently shed over 530 points and 150 points, respectively, as investors were spooked on the surprise resignation of RBI Governor Urjit Patel on Monday evening.

The sentiments had turned bearish as early election trends showed BJP in a neck and neck race with the Congress in the three out of five states including Madhya Pradesh.

However, the prospects of BJP retaining power in MP coupled with short covering and bargain buying by investors supported the gains on the indices.

Index-wise, the Sensex closed at 35,150.01, higher 190.29 points or 0.54 per cent, from the previous close of 34,959.72 points.

It opened at 34,584.13 and has so far touched an intra-day high of 35,207.33 and low of 34,426.29 points.

The Nifty50 ended the day’s trade at 10,549.15 points, higher 60.70 points or 0.58 per cent.

“The negative trend was short lived as markets had already discounted the state election results yesterday (Monday) and short covering was witnessed during the day leading to markets turning positive,” said Viral Berawala Essel Mutual Fund CIO on the market today.

HDFC Securities’ Retail Research Head Deepak Jasani said: “Positive global markets also aided sentiments. Short-covering, along with absence of large selling, led to recovery in the markets. PSU banks saw buying in anticipation of a liberal RBI Governor.”

Abhijeet Dey, Senior Fund Manager – Equities, BNP Paribas Mutual Fund, said: “Interestingly, all the sectoral indices on the National Stock Exchange (NSE) closed the day in positive zone, with the healthcare and PSU banking indices gaining over 2 per cent for the day.”

On the currency front, the rupee settled at 71.86 (71.8550) per US dollar, weakened by 52 paise from the Monday’s close of 71.34.

It had fallen to an intra-day level of 72.44.

“Rupee has recovered well after the knee-jerk reaction to RBI Governor’s resignation forced a sharply lower opening,” said Anand James, Chief Market Strategist, Geojit Financial Services.

“Markets look to have priced in the election results as well, so we are less likely to see any more weakness for now. It also helped that international cues are also supportive with oil and US dollar trading weak.”

In terms of investment, provisional data from the BSE showed that foreign Institutional Investors (FII) sold stocks worth Rs 2,421.06 crore, whereas the Domestic Institutional Investors (DII) bought Rs 2,255.68-crore shares.

The top gainers on the Sensex were Yes Bank, up 7.29 per cent at Rs 177.40; Sun Pharma, up 5.75 per cent at Rs 421.80; Asian Paints, up 4.03 per cent at Rs 1,323.95; State Bank of India, up 2.85 per cent at Rs 281.20; and Axis Bank, up 2.42 per cent at Rs 604.25.

The major Sensex losers were Bharti Airtel, down 1.43 per cent at Rs 290.10; HDFC Bank, down 1.36 per cent at Rs 2,060.80; ICICI Bank, down 1.04 per cent at Rs 342.75; Adani Ports, down 0.68 per cent at Rs 356.90; and Maruti Suzuki, down 0.55 per cent at Rs 7,309.85. (IANS)

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