Value Buying Propels Markets, Sensex Up 174 Points
MUMBAI: Despite concerns over a likely US rate hike, value buying and increase in investors' participation propelled a barometer index of the Indian equity markets to provisionally close with gains of 174 points on Wednesday.
Initially, too, both the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers.
In addition, investors seem to have priced-in the possibility of a 25 basis points hike in key US interest rates. The hike is expected to be announced by the US Fed's Federal Open Market Committee (FOMC) early Thursday, India time.
A hike in US interest rates, which have been at near-zero levels since the last decade, will lead to a massive pull-back of foreign funds from emerging economies like India.
It is also expected to dent business margins as access to capital from the US will become costlier.
However, foreign institutional investors (FIIs) were net buyers on Tuesday.
According to data with stock exchanges, FIIs bought stocks worth Rs.48.67 crore.
Apart from factoring in a US rate hike, markets rose on the back of value buying and increase in investor-participation.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) provisionally closed the day's trade up 174 points.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) gained during the day's trade. It was higher by 51.05 points or 0.66 percent at 7,751.95 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,402.47 points, provisionally closed at 25,494.37 points (at 3.30 p.m.) -- up 173.93 points or 0.69 percent from the previous day's close at 25,320.44 points.
The Sensex touched a high of 25,572.90 points and a low of 25,372.47 points during the intra-day trade.
On Tuesday, the Sensex gained by 170.09 points or 0.68 percent, while the Nifty rose by 50.85 points or 0.66 percent.