Mumbai, Feb 22 (IANS): Short-coverings, coupled with value-buying and positive Asian indices, supported the rise of Indian equity markets during the mid-afternoon trade session on Monday.
Consequently, the barometer 30-scrip sensitive index (Sensex) of the BSE rose 126 points or 0.53 percent.
The Sensex, which opened at 23,783.47 points, traded at 23,835.29 points (at 2.00 p.m.) -- up 126.14 points or 0.53 percent from the previous day's close at 23,709.15 points.
During the intra-day trade, the Sensex touched a high of 23,847.35 points and a low of 23,674.86 points.
The BSE market breadth favoured the bulls -- with 1,368 advances and 983 declines.
Initially, the barometer of the Indian equity markets opened on a positive-to-flat note, following Friday's losses in the US, as well as European markets.
In addition, a weak rupee kept investors' unnerved. The rupee opened at 68.63 to a US dollar from its previous close of 68.47 to a greenback on Thursday. The domestic currency markets were closed on Friday.
It touched a low of 68.72 to a US dollar, during the intra-day trade. This level was last seen on August 28, 2013.
On Friday, the rupee had crashed to a record low of 68.89 to the US dollar in the oversees currency markets. It ended that day's trade at 68.72.
"Indian rupee touched a fresh 30-month-low at 68.72 levels on spot, not far from the all time low of 68.85 on spot," Anindya Banerjee, associate vice president for currency derivatives with Kotak Securities, told IANS.
"However, alleged hand of RBI (Reserve Bank of India) may have saved the rupee from further losses."
According to Banerjee, RBI may have been active on exchange traded currency futures.
However, value-buying and short-coverings which were triggered on hopes of positive budgetary announcements swelled the equity markets.
Market participants are hopeful that the central government may increase expenditure, announce tax concessions and pave the way to reduce the NPAs (non-performing assets) levels of the banking sector.
The parliament's budget session which commences on Tuesday.
Besides, stiffening of crude oil prices and positive Asian markets, led investors to chase stock prices higher.
"Firm oil, as well as rising Asian markets tilted Indian stocks’ bias to positive, while Nifty and Sensex helped themselves to the highest levels since February 10, 2016, " Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.
"However, with parliament’s budget session beginning tomorrow, buyers were not seen chasing prices higher."
Vaibhav Agarwal, vice president and research head at Angel Broking, elaborated that markets traded in the green led by positive Asian cues.
"With no other major triggers on the domestic front and low expectations from the budget, markets will continue to look towards global developments for direction," Agarwal cited.
"US home sales data is awaited for further indications on the US Fed rate hike. European macro data such as the German and UK GDP and Eurozone CPI figures are set for release this week."
Nitasha Shankar, vice president for research with YES Securities, pointed out that broader markets outperformed the headline indices.
"Pharma, media, energy and auto indices are trading in the green, while PSU banks, IT and FMCG are witnessing minor profit booking," Shankar noted.