Market shrugs off weak IIP data, Sensex up 100 pts

Even as factory numbers -- Index of industrial production (IIP) -- for December in the current fiscal raised doubts over Finance Minister P Chidambaram's view that Asia's third-largest economy is showing signs of recovery, key benchmark indices on Tuesday edged higher in choppy trade as bargain-hunting emerged after a sustained slide in share prices for the last few trading sessions.

In effect, the BSE Sensex ended its 8-day losing streak, shrugging off weak IIP data and inflation numbers for December that underscored the weakness in the economy.
Analysts ascribed the day’s rebound in share prices to short covering of derivative positions while saying that the near- term outlook still remained cautious.

Although the day began with a bout of initial volatility as key indices trimmed gains after a firm start, pharma stocks rose on renewed buying and index heavyweight Reliance Industries edged higher by 0.94 percent to Rs 875.95. ONGC led gainers in the Nifty and Sensex, with the stock climbing nearly 4 per cent on better-than-expected third quarter earnings. While ONGC net profit fell 17.5 per cent, the numbers were better than what most analysts had expected.

Foreign institutional investors bought shares worth (net) Rs 981.40 crore from secondary equity markets on Monday, as per Sebi data, which perhaps lifted trading sentiments in the latter part of the day. The BSE Sensex rose 100.47 points or 0.52 per cent to settle at 19,561.04, its highest closing level since February 7, 2013. The index jumped 122.96 points at the day's high in late trade and declined 22.04 points at the day's low in mid-morning trade.

The CNX Nifty at NSE rose 24.65 points or 0.42 percent to settle at 5,922.50, its highest closing level from February 7, 2013. The index hit a high of 5,927.65 and a low of 5,886.45 in intraday trade.

From broader markets, the BSE Mid-Cap index fell 0.31 per cent to 6,722.90 points and the BSE Small-Cap index fell 0.51 per cent to 6,738.77 points. Both these indices underperformed the Sensex.