Equity benchmarks closed off day’s high after losing half of gains in last couple of hours of trade Friday. The Nifty failed to hold the psychological 8800 level on profit booking in select banking & financials stocks and amid caution ahead of Federal Reserve’s two-day policy meeting next week.
Benchmark indices gained for the third consecutive session. The 30-share BSE Sensex was up 186.14 points at 28599.03 and the 50-share NSE Nifty gained 37.30 points at 8779.85 whereas the broader markets ended marginally lower on weak breadth.
Experts say they are not worried due to such intermittent volatility. They expect some volatility initially next week ahead of Fed meet but after that event the market may start moving towards record high on FII inflow and likely improvement in earnings from next quarter onwards.
“We see brighter prospects for investors in emerging markets compared with last year, and the long-term performance of emerging-market equities compares favourably to that of developed markets,” Mark Mobius of Franklin Templeton Investment says.
He says emerging markets have received strong inflows this summer as investors continued to search for higher yields.
Geoff Lewis of Manulife Asset Management says risk-reward ratio is in favour of emerging markets against developed markets and he is bullish on India over China.
Asia ended mixed ahead of Federal Reserve and Bank of Japan meetings. At the time of writing this article, European stocks were trading lower with DAX and CAC falling over a percent, dragged by banks after news of a large fine for Deutsche Bank.
Federal Reserve’s policy meeting will be held for two days in next week – September 20-21. Rate hike hopes already diminished after the recent economic data points but the commentary would be closely watched by global investors.
Indian equities snapped two-week winning streak with the Nifty losing 1 percent and the Sensex 0.7 percent on profit booking and uncertainty over central banks’ move.
Auto stocks were strong with Maruti Suzuki hitting fresh record high of Rs 5,590 intraday, closing 2.25 percent up. Hero Motocorp, Bajaj Auto, Eicher Motors and TVS Motor gained 1.5-4 percent whereas Tata Motors lost 1.5 percent.
Reliance Industries was up 1.24 percent at Rs 1,075.65, the highest closing level since January 13, 2016.
Yes Bank continued to fall, down 4.4 percent today and 20 percent from highs. Tata Steel shed 2 percent today and tanked 10 percent this week post earnings and global commodity fall.
ITC, HDFC Bank, Infosys, Axis Bank and TCS gained 1.5-2 percent whereas ICICI Bank, HDFC, Bank of Baroda and SBI were down 0.6-1 percent.
Wockhardt shares rallied 8.3 percent after sources told Network18 that health regulator US Food and Drug Administration has given a clean chit to the Chikalthana plant that contributes 75 percent to total income of the company.
The market breadth was negative as about 1412 shares declined against 1315 advancing shares on the BSE.