BSE Sensex staged a sharp recovery of 189 points to 26,714.26 in early trade today as fresh buying by investors led to widespread gains, driven by lower current account deficit and trade gap for last fiscal.
Besides, a firming trend in other Asian markets, tracking a rebound on the US bourses, too buoyed sentiments here, brokers said.
The 30-share index, which had lost 200.88 points in the previous session, recovered by 188.80 points, or 0.71 per cent, to trade at 26,714.26.
Trading sentiment got a boost after India’s current account deficit (CAD) for the full fiscal 2015-16 narrowed to USD 22.1 billion, or 1.1 per cent of GDP, as against USD 26.8 billion, or 1.3 per cent of GDP, in 2014-15 on the back of contraction in the trade deficit.
Also, CAD narrowed sharply to USD 0.3 billion, or 0.1 per cent of GDP, in the fourth quarter of 2015-16 from USD 7.1 billion, or 1.3 per cent, in third quarter, on account of lower trade gap.
The country’s trade deficit for the entire fiscal narrowed to USD 130.1 billion from USD 144.9 billion in 2014-15.
Stocks of realty, auto, banking, power, capital goods, PSU, oil&gas, healthcare, metal, FMCG, IT and consumer durables led the gains. The NSE Nifty was trading higher by 51.85 points, or 0.63 per cent, at 8,192.60.
Bucking the trend, shares of sugar companies such as Shree Renuka Sugar, Bajaj Hindusthan, Dhampur Sugar, Sakthi Sugar and Dwarkesh Sugar succumbed to selling pressure and were trading lower by up to 5.56 per cent after government yesterday imposed 20 per cent customs duty on sugar exports to boost domestic supply and check prices.
Asian cues were weak with Japan’s Nikkei surged 1.63 per cent, Shanghai Composite Index gained 0.78 per cent, while Hong Kong’s Hang Seng advanced 0.83 per cent in early trade. The US Dow Jones Industrial Average ended 0.53 per cent higher in yesterday’s trade.