Mumbai :Strong global cues coupled with the positive momentum created by the rate cut on Tuesday helped the benchmark BSE Sensex close 66 points higher, its third straight day of gains, powered by software and pharma stocks despite HCL Tech’s revenue warning.
It was off to a solid start, but gave up a big chunk of its leads in part due to late sell-off following a drop in India’s manufacturing activity.
Profit-booking in banking, auto and realty stocks ensured the 30-share index barometer ended with a modest gain of 66.12 points, or 0.25 per cent, at 26,220.95. This is its strongest close since 26,283.09 on August 31.
The index has added almost 605 points in the last three sessions since RBI announced the policy rate cut.
The NSE Nifty was no exception to profit-booking, which slipped before settling higher by 2 points, or 0.03 per cent, at 7,950.90.
Investor appetite returned after RBI Governor Raghuram Rajan on Tuesday pulled off a surprise by announcing a bigger-than-expected benchmark rate cut of 50 bps to 6.75 per cent—the lowest in four and a half years—to spur growth.
However, selling came to the fore after data showed that India’s manufacturing activity in September expanded at the slowest pace in seven months.
According to Nikkei PMI survey, India’s manufacturing sector output slipped to a seven-month low of 51.2 in September as order flow turned sluggish amid a “difficult economic climate”.
A firming trend in Asia and a higher opening in Europe following overnight gains on the Wall Street gave investors a lot to look forward to as they lapped up recently beaten-down stocks, which boosted sentiment.
An appreciating rupee, which strengthened to 65.51 against the US dollar, kept the momentum going.
Some other macro parameters held up well as fiscal deficit for April-August narrowed to 66.5 per cent of the full-year target and infrastructure output grew 2.6 per cent in August.
On a weekly basis, both BSE Sensex and NSE Nifty surged 357.45 points (1.38%) and 82.40 points (1.04%), respectively.
“Indian benchmarks traded in a narrow range throughout the day. Firm global markets supported the indices as investors preferred to unwind positions ahead of the long weekend. Strong rupee kept the sentiment positive,” said Gaurav Jain, Director, Hem Securities.
Lupin blazed a trail, up 3.62 per cent, on expectations of bullish September-quarter earnings. Other Sensex gainers were Sun Pharma, TCS, Dr Reddy’s, L&T, ONGC and Infosys.
Sectorally, BSE healthcare was in pink of health as it rose 1.46 per cent, followed by consumer durables, capital goods and technology.
Foreign investors net bought shares worth Rs 116.08 crore yesterday, data showed.
The market will remain shut tomorrow on account of Gandhi Jayanti.