by FP Staff Aug 23, 2013 04:15 IST
MUMBAI (Reuters) - The BSE Sensex surged more than 2 percent on Thursday, snapping a four-day losing streak, as metal stocks rallied on China's improved manufacturing data, while blue chips rose on value buying.
Stocks battered in each of the last four days marked their biggest single-day percentage gain in nearly two months, after an upbeat reading on China's manufacturing sector, followed by a recovery in the rupee from a record low of 65.56 hit earlier in the day.
However, traders remain wary of foreign flows and rupee volatility at a time when overseas investors who had been net buyers of Indian stocks in 2013 sold a net $500 million worth of shares in the four sessions through Wednesday.
"There is no panic selling by foreign investors yet, but certainly if that happens then it may weigh on equity and currency, which may feed on each other," said G. Chokkalingam, managing director and chief investment officer at Centrum Wealth Management.
The equity market does not have adequate depth to absorb selling of even $1 billion to $2 billion by FIIs, added Chokkalingam.
The benchmark BSE Sensex ended up 2.27 percent, or 407.03 points, at 18,312.94, after hitting its lowest intraday level in nearly a year.
The broader Nifty rose 2 percent, or 105.90 points, to end at 5,408.45, closing above the psychologically important 5,400 level.
Shares in metal companies surged on expectations of a pick-up in China after HSBC said its preliminary purchasing managers' index rose to 50.1 in August, a four-month high and just above the 50 level that separates growth from contraction.
Tata Steel Ltd (TISC.NS) jumped 10.5 percent, while Hindalco Industries Ltd (HALC.NS) surged 11.5 percent.
Sesa Goa Ltd (SESA.NS), the Indian unit of oil and mining group Vedanta Resources Plc (VED.L), gained 13.3 percent on inclusion in India's benchmark index in place of another group unit Sterlite Industries Ltd (STRL.NS).
Sesa Goa said on Saturday its merger with Sterlite Industries and the group's various Indian arms to create a single unit has become effective. Sterlite Industries also rose 10.2 percent.
Among blue chip shares, ITC Ltd (ITC.NS) rose 2.4 percent on value buying after falling nearly 10 percent in the four sessions to Wednesday, while Bharti Airtel Ltd (BRTI.NS) rose 4.8 percent.
IT shares also rose on hopes of improving realisations after the rupee hit a record low of 65.56 to the dollar.
Infosys Ltd (INFY.NS) rose 2.1 percent, while Tata Consultancy Services Ltd (TCS.NS) gained 3.6 percent.
However, among stocks that fell, Yes Bank Ltd (YESB.NS) dropped 4.9 percent on fears of foreign selling. FIIs hold about 46 percent stake in the bank, exchange data shows.
(Editing by Subhranshu Sahu)
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