The Indian stock market suffered a setback of sorts after opening on a positive note on Tuesday, but recovered swiftly and traded in the positive zone right through the session to end notably higher.
After initial hesitancy, investors indulged in some strong buying at several counters, shrugging off news about the partial shutdown of the U.S. government and a dismal fiscal deficit report. Data showing a lower than expecte current account deficit, a positive close in most of the markets in the Asian region, a steady trend in Europe and the rupee's upmove against the greenback aided sentiment to an extent.
The BSE benchmark Sensex, which declined to around 19,265 after a positive start, rose to 19,532.91 later on in the session and eventually ended at 19,517.15, gaining 137.38 points or 0.71%. The Nifty index of the National Stock Exchange closed at 5780.05, slightly off the day's high of 5786.45, recording a gain of 44.75 points or 0.78%. The Nifty touched a low of 5700.95.
According to a release from Markit Economics, the manufacturing activity continued to contract for the second consecutive month in September after deteriorating for the first time in four-years in August. The widely tracked HSBC Purchasing Managers' Index, although marginally up from the previous month, stood at 49.6 points in September from 48.5 points in August, indicating moderate contraction in the sector. A reading above 50 indicates growth and below that depict contraction. The PMI quarterly average for the second quarter of this year was the lowest since the fourth quarter of 2008.
Realty and bank stocks, which were among the most prominent losers in recent weeks, had a good outing. Capital goods stocks too mostly closed on a firm note. Automobile stocks ended mixed, amid mixed sales data for September.
Select consumer durables and pharmaceuticals stocks edged higher. Information technology, FMCG and metal stocks saw some buying but failed to sustain at higher levels. Power and oil stocks traded week, with the later losing ground on fuel price reduction.
Banking sector heavyweights HDFC Bank (3%), ICICI Bank (3%) and State Bank of India (1.8%) moved up sharply. BHEL ended nearly 3% up on bargain hunting. Housing finance stock HDFC gained 2.75%.
Bajaj Auto moved up 2.4%. Maruti Suzuki gained 1.7% on 11.7% rise in sales in September. Tata Motors ended nearly a percent up and Mahindra & Mahindra moved up 0.7%, while Hero Motocorp closed lower.
Tata Steel, Larsen & Toubro, Bharti Airtel, Dr Reddy's Laboratories and Tata Consultancy Services gained 1% - 1.5%. ITC and Coal India also closed on a firm note.
Realty stock DLF, up 7%, was the top gainer in the Nifty index. Ranbaxy Laboratories ended nearly 6% up. IndusInd Bank and Axis Bank ended higher by 4.7% and 4%, respectively. IDFC, Bank of Baroda, Kotak Bank and Power Grid Corporation gained 1% - 3.5%.
Tata Power, Sesa Goa, NTPC, ONGC, Hindustan Unilever, BPCL, Ambuja Cements, Hindalco, Jindal Steel & Power, HCL Technologies and Grasim Industries ended lower by 1% - 4%.
The market breadth was marginally positive. Out of 2486 stocks traded on BSE, 1320 stocks moved up. 1007 stocks declined and 159 stocks ended flat.