The market bounced back in last hour of trade with the Nifty reclaiming 7500 intraday Wednesday ahead of outcome of Federal Reserve’s two-day meeting due tonight. Private banks, FMCG and select technology stocks helped the market rebound.
The 30-share BSE Sensex rose 131.31 points to 24682.48 and the 50-share NSE Nifty climbed 38.15 points to 7498.75 while the broader markets outperformed benchmarks. The BSE Midcap and Smallcap indices fell 0.4 percent and 0.2 percent, respectively.
Analysts expect the market to hit its record high in next financial year, though in short term, it may remain rangebound.
Vibhav Kapoor of IL&FS believes that Nifty could inch towards 9,000-mark by March 2017 if global factors stabilises and monsoon turns out to be good, unlike the last two seasons. With the fears of global recession coming down, markets have started to settle down, he feels.
Globally markets were mixed as markets await the latest interest rate decision from the US Federal Reserve’s monetary policy committee. In Europe, Germany’s DAX gained 0.3 percent while Britain’s FTSE and France’s CAC wiped out gains to trade flat (at 16 hours IST). In Asia, Nikkei lost 0.8 percent while Shanghai gained 0.2 percent
Analysts do not expect any rate hike but comments from FOMC policymakers will be scrutinised for indications on the path of tightening.
According to Jan Lambregts of Rabobank, Fed might hint at a hike in June.
On home turf, ITC gained 1.7 percent. CLSA has retained buy rating on the stock as news flow on reduction in new pictorial warnings (from proposed 85 percent to 50 percent) signals some rationality in regulations.
Infosys was the leading contributor to Sensex’s gains, up 1.6 percent. Jefferies has maintained buy rating on the stock as it says recent commentary suggests Infosys could guide higher than NASSCOM’s 10-12 percent YoY guidance for FY17. Despite concerns on macro and industry deceleration, momentum is likely to sustain on the back of strong deal pipeline and order book, it feels.
Among others, ICICI Bank was the top gainer on Sensex, up more than 2 percent followed by HDFC, Lupin, Axis Bank and Cipla with more than 1 percent while Bajaj Auto, Bharti Airtel and Hindalco Industries lost 1-3 percent.
In broader space, Eicher Motors fell more than 4 percent after CLSA downgraded the stock to underperform from buy and slashed target price to Rs 20,400 from Rs 20,900 earlier as the stock has fully priced in strong Royal Enfield outlook.
Den Networks rallied 15 percent on selling entire 50 percent stake in joint venture company Star Den to partner Star India.
Lycos Internet crashed 20 percent after its US subsidiary Ybrant Media Acquisition filed for bankruptcy protection.
The market breadth remained weak as about 1405 shares declined against 1160 advancing shares on the Bombay Stock Exchange.