The Hindu Business Line : Markets make smart recovery on industrial growth data

Choppy session
FIIs were net sellers by Rs 1,211.2 crore; domestic institutional investors were net buyers for Rs 500.44 crore
Oil and gas, capital goods and metal stocks were major gainers

Our Bureau

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Mumbai, June 12 Thursday was proof of the nervous state of the equities market.

Stocks sagged in the early hours of trade on the RBI’s hike in short-term lending rates, to make sharp recovery only hours later as the Index of Industrial Production figures came in.

It was a market for speculators and day traders only, remarked an official with a broking firm

. The Sensex fell by a hefty 437 point intra-day; it finally closed at 15,250, witnessing a swing of more than 500 points from its day’s low of 14,748.

FIIs sold equities for the fourth consecutive day of the week; they were net sellers by Rs 1,211.2 crore. Domestic institutional investors were net buyers for Rs 500.44 crore, according to BSE and NSE’s provisional data.

Net sales of equities by FIIs in the past three days amount to Rs 2,336 crore; FII net sales in June so far amount to Rs 5,321.50 crore.

“The markets today showed remarkable recovery in spite of weak global cues and RBI’s move to increase the repo rate by 25 basis points to 8 per cent. Good IIP numbers also helped,” said Mr P.K. Agarwal, President, Research, Bonanza Portfolio Ltd.

The Index of Industrial Production (IIP) data released on Thursday for April recorded a 7 per cent growth as compared to 3 per cent in March. However, it was much lower than the 11.3 per cent growth for the same month a year ago.

“This year is going to be tough since we are dependent on FIIs inflows but they don’t seem to be in a hurry to come back; we may see another heavy fall,” said Mr Waqar Naqvi, Chief Executive, Taurus Asset Management Co. Ltd.

“When commodity prices come down, India might become more attractive for the FIIs,” said Mr Naqvi adding that “The economies of Russia, Brazil and Vietnam, where commodity stocks had 65 to 75 per cent share in the local equities markets, were not falling.”

BSE Midcap and Small cap indices outperformed the Sensex by gaining 0.53 per cent and 0.78 per cent.

Among the sectoral indices, BSE Oil & Gas, Capital Goods and Metals were the major gainers.

The industrial sectors that were major losers on Thursday were IT, health care and automobile.

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