Snapping its six-day losing run, the benchmark BSE Sensex on Wednesday bounced back by 359 points to 26,840.50 on value-buying in blue-chips after US index compiler MSCI Inc decided to defer inclusion of China’s shares in its widely tracked MSCI Index. The rupee also recovered by nine paise to 63.83 against the dollar.
Foreign funds and retail investors started buying after MSCI decided not to add Chinese stocks to its emerging-markets index. The inclusion would have resulted in a sharp increase of China’s weightage in the index at the expense of other emerging markets, including India.
“Deferral of China’s shares into MSCI index, strong global cues and stronger rupee lifted the sentiment,” said Gaurav Jain, Director at Hem Securities.
On Tuesday, the Sensex had dropped 42 points to 26,481.25, taking its cumulative six days fall to 1,367.74 points. The index had closed at 26,429.85 on October 20 last year. Meanwhile, the 50-share NSE Nifty reclaimed the 8,100-mark by surging 102.05 points or 1.27 per cent to close at 8,124.45.
“The deferment of China’s mainland stocks inclusion in MSCI may have given an additional reason for buyers to chase prices higher,” said Anand James, Co head Technical Research Desk, Geojit BNP Paribas. MSCI said investors wanted China to go further in removing barriers that make it difficult for foreigners to invest in the country .