Sensex and Nifty on Tuesday bounced back from six-month lows hit in the previous session, led by gains in auto, FMCG, metal and IT stocks. Gains in today’s session came primarily on account of short covering rally after the benchmark indices fell for six days is a row, said analysts.
Rise in other Asian share markets also lifted sentiment of investors.
The benchmark BSE Sensex registered first gain in seven sessions.
But analysts warned the gains were unlikely to last amid growing concerns that the government’s shock move to remove higher-denomination banknotes from circulation would hit the economy more than expected.
“I expect Nifty to fall to 7,650 levels very soon and it could get worse. Don’t expect any substantial upward movement at least until February next year,” said Mugilan K., deputy manager of research at Cholamandalam Securities.
The Sensex ended 196 points or 0.76 per cent higher at 25,960.78 and the Nifty rose 0.92 per cent or 73.20 points to settle at 8,002.30.
Both indexes had hit their lowest since May 25 on Monday, on worries sparked by Prime Minister Narendra Modi’s demonetisation move.
Auto stocks witnessed good buying interest in today’s session. The BSE Auto index rose 1.89 per cent led gains in Maruti Suzuki, Bajaj Auto, Hero MotoCorp and Tata Motors.
Metal, realty, FMCG and oil & gas stocks also witnessed good buying interest.
From the Nifty basket of shares, 41 ended higher while 10 closed lower.
The broader markets also witnessed buying as the BSE mid-cap and small-cap indices rose over 1 per cent each.