Sensex reverses 3-day loss to end above 27000; Asia cues, fading US rate hike fears lift mood

Equity markets rebounded sharply on Thursday, marking its first positive close in last four sessions, as the revival in other Asian and European markets sentiment in the backdrop of a weak US economic data announced a day before subsided investor concerns, which fear a much-hyped possible rate hike this year could fuel fund outflows from emerging markets and trigger massive correction. With the market sailing in positive territory through the trading session, the benchmark Sensex amid smart buying in automobile, metals, oil & gas and capital goods shares closed above the psychological 27,000-mark barrier. [caption id=“attachment_2469916” align=“alignleft” width=“380”]  Reuters[/caption] The gains in the markets came after a gap of three sessions where the Sensex lost 300 points on the back of weak global market cues. The 30-share BSE S&P Sensex finally ended the session at 27,010.14, up 230.48 points, or 0.9 percent from previous close. Intra-day, the index rose 258 points to touch the day’s high of 27,037.95. The broader 50-stock CNX Nifty closed the day at 8,179.50, up 71.60 poits, or 0.9 percent. Market breadth ended positive with 1,534 stocks advancing against 1,191 stocks declining on BSE. Among other Asian indices, China’s Shanghai Composite rose 2.3 percent while Hang Seng gained 2 percent and Japan’s Nikkei ended 1.1 percent higher. Key European gauges, too, exhibited strong gains, rising over 1 percent in mid-day trades. Market experts also opine that foreign institutional investors turning net buyers of equities this month so far, has reinforced optimism amongst local traders. In the current month, FIIs have purchased local shares worth Rs 2,637 crore, while their domestic counterparts, the domestic institutional investors were net sellers of shares worth Rs 1,450 crore. Amid signs of a likely rate hike in the US by end of this year and sluggish growth prospects in other emerging markets, FIIs pulled out funds worth Rs 22,628 crore from local equities in previous two months. Automobile shares were the star performers as investors anticipate the benign interest rate scenario coupled with falling fuel prices and new launches would help revive the sluggish automobile sales over the next couple of months. Tata Motors led the pack, soaring 8.1 percent to Rs 380.70. While Maruti rose 3 percent to Rs 4,379.85, HeroMoto Corp gained 2.4 percent to Rs 2,565.10 and Bajaj Auto was up 0.4 percent at Rs 2,450. Among other gainers in the Sensex pack, share of BHEL rose 3 percent to Rs 211.70, Tata Steel appreciated 2.9 percent to Rs 255.30, Gail moved up 2.2 percent to Rs 323.40 and Coal India was up 2.1 percent at Rs 341.80.