Business

Sensex, Nifty gain 1% on firm global cues ahead of Fed meet

Benchmark share indices ended over 1% higher, amid a choppy trading session, led by financials on expectations that weak US economic data may prompt the US Federal Reserve not to announce hike interest rates at it two-day policy meet which begins later today. 

Meanwhile, Finance Minister Arun Jaitley told lawmakers on Tuesday that India’s current account deficit will “hopefully” be less than 1% of gross domestic product (GDP) in the fiscal year that begins in April which further buoyed the trading sentiments.

The 30-share Sensex surged 299 points to close at 28,736 and the 50-share Nifty gained 90 points to end at 8,723.

“It appears from daily chart that Nifty was formed the “Head and Shoulder” pattern, which is bearish in nature. Nifty has given the neckline breakdown of same in yesterday session. Today, nifty saw a gap up opening on the back of positive cues from global markets but couldn’t holds the high levels, filled the gap in the late afternoon. In a nutshell, short term and medium term bias are negative for the markets; breakdown of 8610 can open the door for further downside upto 8500 levels, which is 100EMA on daily chart.” Said Mudit Goyal, Technical Analyst SMC Global Securities Limited.

Meanwhile, foreign institutional investors were net sellers in equities to the tune of Rs 763 crore on Monday, as per provisional stock exchange data.  

RUPEE

The rupee was trading strong by 8 paise at 62.73 on increased dollar selling by banks and exporters amid weak dollar overseas on tepid US manufacturing data.

CRUDE

Brent crude oil prices reversed most of their early gains to steady below $ 54 per barrel on Tuesday as high ongoing oversupply dragged on the market.

KEY STOCKS

On the sectoral front, barring IT and Teck indices, all sectoral indices ended firm with BSE Auto, Bankex, Consumer Durables, Capital Goods, FMCG, Healthcare, Metal, Oil & Gas and Power indices ending higher between 1-2%. 

Metal shares gained on prospect of further stimulus measures from China which may raise hopes of a boost in demand in the biggest consumer. Hindalco, Sesa Sterlite, Tata Steel were up between 2-6%.

Shares of Tata Motors ended higher by 2% on expectations of a revival in the demand for commercial vehicles.

Sun Pharmaceuticals Industries, the pharmaceutical giant has surpasses the State Bank of India (SBI), the country’s largest public-sector lender in overall market capitalization (m-cap) ranking. The stock was up nearly 1%.  Among its peers, Cipla and Dr Reddy’s lab gained up to 4%.

Banks have shown healthy growth in their advance tax deposit this quarter, with the highest payer, State Bank of India, depositing Rs 1,750 crore, 20 per cent higher than in the corresponding period of the previous year.

According to sources, ICICI Bank and YES Bank have shown 32 per cent and 30 per cent jump in their tax deposit to Rs 1,295 and Rs 260 crore, respectively, in the quarter. Advance tax numbers are significant, as they are used by analysts to reverse-calculate profit before taxes. SBI, ICICI Bank, HDFC Bank, Axis Bank gained between 0.5-3%.

After the passage of the insurance Bill, Indian promoters of life insurance companies are expected to see inflows of around Rs 50,000 crore through stake sale to foreign partners or other financial intermediaries and issue of more shares. Kotak Institutional Equities, in a recent report, says the top five life insurance companies – Bajaj Allianz, HDFC Standard Life, ICICI Prudential, Max Life and SBI Life – stand to make capital gains of Rs 20,000 crore if they pare their stake to 51 per cent, without issuing more shares. The report said that improving ‘Annual Premium Equivalent’ (APE) flows on strong capital markets will boost Embedded Value (EV) growth, driving valuations of insurance companies (and capital gains for their parent). Shares of HDFC rallied 2.6%.

A strong rupee casted its shadow on the IT pack. Infosys was down 1% while Wipro dropped 0.7%.

Having failed to attract any Japanese or Korean shipbuilders to build LNG vessels in India, PSU firm GAIL (India) would reissue the multi-billion dollar tender with “changed norms”. The gas marketing and trading company was forced by the government to buy one-third of LNG ships, required to ferry gas from the US starting 2017, from Indian manufacturers, according to media reports. GAIL lost 0.5%.

Consistent Selling was evident in the telecom major Bharti Airtel. The stock was down nearly 1%.

Tata Power has successfully commissioned the second unit of 63 MW of its 126 MW Dagachhu hydro power project in Bhutan. The stock ended the session 0.4% lower.

Shares of Jindal Steel and Power (JSPL) tanked 8.5% to Rs 174 on the Bombay Stock Exchange (BSE). According to Business Standard reports, of the 34 blocks, auctioned in two phases, letters of allocation for eight have not been signed with the successful bidders. These blocks, according to the ministry of coal, had comparatively low bids and would need a re-look by the Nominated Authority (NA) for the re-allocation.

In the broader market, the BSE Mid-cap and Small-cap indices underperformed the large counterparts and ended the session higher between 0.2-0.6%.

Market breadth ended weak on the BSE with 1,436 losers against 1,378 gainers.