Sensex register its first fall in 5 weeks, late buying saves the day

 A late burst of buying lifted the Sensex by 49 points to close at 31,262.06 on a day marked by high volatility but it was not enough to stop the bourses from recording their first fall in five weeks.

Indian bourses largely defended world pressure in the midst of an unexpected outcome for UK Prime Minister Theresa May's Conservatives with political uncertainty taking centre stage globally.Though the Conservative party managed to get a minor win, which guarantees they are set to be the largest party in the UK Parliament, but fell well short of a majority. The early sell-off was triggered by rumours that IT bellwether Infosys' promoters were planning to sell their stakes, dragging the stocks to hit their lowest-level in over a month. Infosys Ltd ended down 0.80%, after falling as much as 3.5% earlier.

Vinod Nair Head of Research, Geojit Financial Services Ltd

The market bounced back after a subdued momentum during the day as the verdict of UK election has not created any impact in the EMs. On the other hand, Investors are a bit cautious given the market's strong performance in the last one year compared to the tepid results. Some are under profit-booking mode and waiting for some correction to come back to the market. Also, investors are shifting their focus to the week ahead, FEDs policy decision to get cues on rate hike trajectory."

A sharp rebound in European markets, which showed a muted reaction to the UK elections that resulted in a hung Parliament also supported the recovery momentum. Brisk buying was seen across sectors such as realty,
metal, auto, banking and healthcare amid a firming trend in global markets. Furthermore, covering-up of short positions by bears too supported the late recovery in stocks, helping wipe off initial losses. The 30-share index started on a bearish note at 31,196.86 stayed in the negative terrain for most part of the day to hit a low of 31,087.28 as participants indulged in trimming their positions to lock in gains.

However, late buying helped it stage a strong comeback to wipe off the day's losses to scale a high of 31,289.99 before ending 48.70 points, or 0.16%, higher at 31,262.06. The gauge had lost 57.92 points in the previous session. The NSE Nifty also went up by 21 points, or 0.22%, at 9,668.25, after moving between 9,608.15 and 9,676.25. BSE sectoral indices led by realty, metal, auto, banking, healthcare and capital goods led the recovery, rising up to 2.60%. Both the BSE and NSE indices recorded their first weekly fall in five weeks by losing 11.23 points, or 0.03% and 14.75 points, or 0.15%.

The broader market outperformed the key indices with the small-cap index rising 0.50% and the mid-cap index rose 0.28%. Foreign portfolio investors (FPIs) bought shares worth a net Rs 90.78 crore, while Domestic Institutional Investors (DIIs) had also bought shares worth a net Rs 738.78 crore on Thursday as per provisional data. Globally, in the Asian region, Japan's Nikkei was up 0.52% and Shanghai Composite Index rose 0.26%, while Hong Kong's Hang Seng was down 0.13%. Markets in Germany, France and UK were up in their early deals.