MUMBAI: A thaw in Indo-China matrix after the the Doklam dispute plus improving services data on Tuesday brought cheer to markets as key stock indices pushed higher at the close defying intermittent spells of turbulence. Investors went looking for bargain in banking, oil and gas and auto stocks.
India and China on Tuesday agreed to move forward in their ties, with Chinese President Xi Jinping telling Prime Minister Narendra Modi that he wants to put the relationship on the “right track”. Meanwhile, August services sector activity contracted for the second consecutive month, but at a slower pace, a monthly survey has found. The Nikkei India services purchasing managers’ index (PMI) improved slightly to 47.5 in August, from 45.9 in July.
BSE Sensex jumped at the open and hit the day’s high of 31,863.47. But due to weak Asian markets, the barometer ended at 31,809.55, still up 107.30 points, or 0.34%, from its previous close. The Sensex had lost 190 points in the previous session, in line with a general weakness across the globe set off by North Korea’s nuclear test on Sunday. NSE Nifty also moved up by 39.35 points, or 0.40%, to end at 9,952.20, after moving between 9,963.10 and 9,901.05.
“Market started with a subdued bias, but later recovered with a sign of improving bilateral relationship between India and China. Additionally, improving manufacturing and service data (August) and tax collection will address concerns on valuation,” said Vinod Nair, head of research, Geojit Financial Services. Days after the prolonged stand-off in the Doklam area of the Sikkim sector was defused, the two leaders held an hour- long meeting which Modi described as “fruitful”.
Buying activity picked up momentum in the later part of the session, in tandem with strong opening of European shares. The overall recovery received some support from consumer durables, up 2.32%, along with realty, oil and gas, metal and banking stocks which recouped their losses to an extent.
Coal India Ltd remained in the lead, with a gain of 2.96%, with Adani Ports adding 1.60%, Bajaj Auto 1.58% and Reliance Industries Ltd 1.34%. Bharti Airtel trailed with most losses, down 2.25%. Broader markets such as small- and mid-cap indices surged up to 1.03%.
Foreign funds net offloaded shares worth Rs873.91 crore on Monday, showed provisional data. For a change, even domestic institutional investors (DIIs) dumped shares worth Rs49.10 crore.