Indices shift gears after 3 days of losses

Mumbai: India's stock indices gained on Thursday, snapping three days of losses. The rise was led by metal stocks, which rallied amid reports that China may soon impose export duties on steel products. But gains were moderate as the mood remains skittish with emerging market investors taking a cautious line in the wake of China’s crackdown on some of its most prominent companies in the technology and education sectors.

The Nifty ended 69.05 points or 0.44% up at 15,778.45. The Sensex closed 209.36 points or 0.4% higher at 52,653.07. Both indices had fallen by a cumulative 1% in the prior three trading sessions.

Foreign portfolio investors (FPIs) dumped shares worth Rs 866 crore on Thursday, extending their selling spree in Indian equities amid growing risk aversion among global fund managers to emerging markets. So far in July, they have sold to the tune of over Rs 7,500 crore.


Investors in developed countries have been perturbed by developments in China, arguably the biggest disruption to that country’s stock market since it began in 1990, said Mark Matthews, head of Asia research at Swiss wealth manager Bank Julius Baer.

China’s regulators recently announced an effective ban on the country's private tutoring industry, which triggered concerns of a broader crackdown on Chinese tech companies listed abroad.

‘India may Benefit’
The regulator has sought to ease concerns among international investors.

Matthews said once the dust settles over the issue, India may benefit as an alternative investment destination.

"Now this has all happened, a lot of people will be interested in India who wouldn’t have been before, because India has a good pipeline of new economy companies coming to market," said Matthews. "It’s tiny compared to what China has, but material enough nonetheless."

Technical analysts said downsides might be limited but upside momentum is yet to pick up in the market. "The short-term trend of Nifty seems to have reversed up, but the momentum on the upside is yet to pick up," said Nagaraj Shetti, technical research analyst at HDFC Securities. "A decisive move above 15,810 levels is likely to pull the market towards 15,900 in the next couple of sessions. Intraday support is placed at 15,715."

On Thursday, Tata Steel ended as the top gainer on the Nifty with a nearly 7% rise while Bajaj Finserv, SBI, HCL Technologies and Sun Pharma ended 2-4% higher.