Ending its six-day losing streak, the BSE Sensex on Wednesday surged 359 points and rebounded from near eight months low to 26,840.50 on value-buying in blue-chips like BHEl, Bajaj Auto and Reliance Industries ltd (RIl), after MSCI's decision to defer inclusion of China's shares. Besides, rupee's recovery against dollar to Rs 63.83 too boosted sentiment.
Foreign funds and retail investors started buying after MSCI decided not to add Chinese stocks to its widely tracked emerging-markets index. The inclusion would have resulted in a sharp increase of China's weight-age in the index, which would have come at an expense of other emerging markets, including India.
“Deferral of China's shares into MSCI index, strong global cues and stronger rupee lifted the sentiment,” said Gaurav Jain, Director at Hem Securities. Recovery was so strong that all 12 sectoral indices closed with gains between 0.34 and 2.08 per cent with IT, capital goods, teck, auto, oil & gas, banking and power sectors leading the pack.
Overall, 29 out of 30 Sensex scrips gained, while Cipla closed a tad lower. The Sensex opened on a strong footing at 26,517.32 and continued its upward trend to hit day's high of 26,934.74 on across-the-board value buying in blue-chips.
However, due to profit-booking at higher levels, the index slipped at the fag-end and closed 359.25 points or 1.36 per cent higher at 26,840.50. On Tuesday, the gauge had dropped 42 points to 26,481.25, taking its cumulative six days fall to 1,367.74 points.
The index had closed at 26,429.85 on October 20 last year. The 50-share NSE Nifty halted its seven-session falling trend and reclaimed the 8,100-mark by surging 102.05 points or 1.27 per cent to close at 8,124.45.
“A relief rally after seven consecutive selling trading session was witnessed at the bourses on the back of short covering, lower level buying,” Jain said. Stocks of BHEl emerged top gainers among 30-Sensex stocks by surging 4.21 per cent to Rs251.40, followed by Wipro 3.60 per cent to Rs563.30.
Among other Asian markets, China, Singapore and Taiwan ended higher, while Hong Kong, Japan and South Korea finished lower.
Meanwhile, foreign investors sold shares worth Rs645.02 crore yesterday, while domestic investors bought shares worth Rs692.29 crore as per provisional data.
Jignesh Chaudhary, Head Of Research at Veracity Broking said, “local indices closed on a positive note on the investors' confidence. Indices added over one percent during the day as blue-chip companies traded higher on value-buying with well supported from strong Asian market.”