Sensex ends 195 points higher, Nifty by 73 after strong performances by Asian markets
Analysts said the gains were unlikely to last as the government's demonetisation move could have a greater effect on the economy than expected.
The Bombay Stock Exchange Sensex rose 195.64 points to end at 25,960.78 and the National Stock Exchange Nifty ended 73.20 points higher at 8,002.30 on Tuesday as strong performances by Asian markets boosted Indian stocks. Most sectoral indices, led by metal and auto stocks, also traded strongly, NDTV reported.
Experts attributed this gain to firm Asian cues. More investors were reported to be buying stocks after regional markets made some gains following improvements in the United States and European equity markets. Besides, sustained buying by domestic institutional investors also supported the recovery, reported Mint.
This comes after six consecutive days of losses. While analysts have welcomed the gains, they have predicted that it is unlikely to last because of growing concerns that the government’s move to demonetise Rs 500 and Rs 1,000 notes will have a much greater effect on the economy than expected. Managing Director of Taurus Asset Management RK Gupta had said, “It won’t be surprising to see the Nifty fall to the 7,700 level.”
Stock markets opened on a positive note with the Sensex gaining 260 points and the Nifty crossing the 8,000-mark. However, at 11.30 am, there was a slight drop with the Sensex trading at 25,862.44 and the Nifty at 7,965.65.
Among the major stock gainers during the day were Information Technology firms. Stocks of both Infosys and Tata Consultancy Services rose by 1.5% while those of Wipro saw a 0.1% surge during intra-day trading. HCL Technologies and Tech Mahindra too made some marginal gains.
Russian President Vladimir Putin’s remarks about a possible deal to limit oil production raised expectations and sent international crude oil prices surging. This, in turn, helped stocks of Oil & Natural Gas Corporation Limited to rise by 2.4% to Rs 282.30. However, bank stocks continued to fall. State Bank of India stocks witnessed a 0.8% drop while that of Punjab National Bank fell by 0.6%. Similarly, stocks of Yes Bank, HDFC Bank, Bank of Baroda, Syndicate Bank and IDBI Bank nosedived.