Mumbai : Bargain hunting and unravelling of short positions by investors propelled a barometer index of the Indian equities markets into closing with gains of over 216 points on Thursday.
Initially, both the bellwether indices of the Indian equity markets opened on a positive note.
The upward trajectory was supported by selective value buying by investors as the markets were in an extremely oversold position.
In addition, investors confidence was lifted a day after the union cabinet approved some reform measures in the infrastructure sector.
The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) made gains after six consecutive days of losses. It closed higher by 216 points or 0.86 percent during the day's trade.
Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) made gains during the day's trade. It rose by 71 points or 0.93 percent at 7,683.25 points.
The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,136.71 points, closed at 25,252.32 points -- up 216.27 points or 0.86 percent from the previous day's close at 25,036.05 points.
The Sensex touched a high of 25,289.58 points and a low of 25,034.14 points during the intra-day trade.
The barometer index had receded by 1,134.23 points during the last six consecutive sessions, whereas the NSE Nifty declined by 343 points.
Furthermore, the six-day long correction had reduced volumes in the cash market segment in the last three days to Rs.16,000 crore, from nearly Rs.20,000 crore early this month.
Market observers said that short coverings of position by investors led the relief rally after six consecutive days of losses.
"Markets ended in the green after six straight sessions of losses led by covering of short positions by traders," Vaibhav Agarwal, vice president and research head at Angel Broking, told IANS.
Agarwal pointed out that markets' positive trajectory might be short-lived due to the logjam in parliament and absence of fresh triggers.
"We do not expect any meaningful upside from current levels in the absence of any major trigger," Agarwal elaborated.
"Investors will watch out for inflation and industrial production data over the next couple of days, for further direction. We also expect volatility to spike next week ahead of the US FOMC (Federal Open Market Committee) meet."
Apart from value buying and short coverings, forecast of positive monthly industrial output and inflation data points slated to be released on Friday brought back investors, said Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services.
"Forecast and expectations of healthy index of industrial production (IIP) data and cooling of consumer price index (CPI) has added positive sentiment to the markets," James told IANS.
James added that the finance ministry's �investor-friendly� clarification added to the positive momentum.
The ministry clarified that while several notices had been issued to foreign portfolio investors, treating their income-tax returns as defective, they would now not be treated so if such institutions are registered with SEBI and meet two other criterion as well.
Besides equities, the Indian rupee, too, gained in the day's trade. It strengthened by 13 paise at 66.72 to a US dollar from its previous close of 66.85 to a greenback.
The foreign institutional investors (FIIs) were net sellers during the day's trade at the stock exchanges, whereas the domestic institutional investors (DIIs) were net buyers.
According to data with stock exchanges, FIIs sold stocks worth Rs.580.28 crore, while DIIs bought scrip worth Rs.410.92 crore.
Sector-wise, healthy buying was witnessed in information technology (IT), oil and gas, metal, capital goods and consumer durables sectors.
The S&P BSE IT index augmented by 138.48 points, oil and gas index gained by 168.42 points, metal index increased by 111.95 points, capital goods index rose by 107.39 points and consumer durables index edged-up by 85.49 points.
Major Sensex gainers during Thursday's trade were Reliance Industries, up 3.71 percent at Rs.949.90; Hindalco Industries, up 2.71 percent at Rs.75.75; Tata Steel, up 2.69 percent at Rs.232.95; NTPC, up 2.50 percent at Rs.133.45; and HDFC, up 2.30 percent at Rs.1,181.10.
The major Sensex losers were Mahindra and Mahindra (M&M), down 1.66 percent at Rs.1,291.05; Lupin, down 1.42 percent at Rs.1,736.10; Tata Motors, down 1.18 percent at Rs.389.30; State Bank of India (SBI), down 1.02 percent at Rs.231.95; and BHEL, down 0.83 percent at Rs.167.55.(IANS)