Sensex makes modest gains in risk-off trade

Building on the ongoing recovery, the Sensex added about 85 points in early trade today as a positive global trend kept investors' morale high.

Speculators cut down their short positions ahead of the March derivatives contract expiry tomorrow and the rupee strengthened to a 17-month high of 64.95 against the dollar, which helped improve the risk appetite.

The BSE 30-share barometer advanced 84.92 points, or 0.28 per cent, to 29,494.44. The gauge had gained 172.37 points in the previous session on the back of upbeat global cues on renewed optimism for tax reforms in the US and continued foreign inflows. Sectoral indices led by infrastructure, power, capital goods, technology and IT were in the green, adding up to 0.60 per cent.

The NSE Nifty was also higher by 33.25 points, or 0.36 per cent, to quote at 9,134.05. Traders said increased buying by retail investors coupled with sustained foreign fund inflows and covering-up of outstanding short positions ahead of the March derivatives expiry had a positive impact.

A firm trend on other Asian bourses following a rebound on the Wall Street fuelled by strong US data influenced sentiment, they said.

Hong Kong's Hang Seng was up 0.28 per cent while Shanghai Composite edged up 0.04 per cent in early trade today. Japan's Nikkei shed 0.03 per cent. The US Dow Jones Industrial Average ended higher by 0.73 per cent yesterday.