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Sensex up 139 pts, investors cautious ahead of FOMC outcome

16:47

The News International Team

Equity benchmarks managed to recoup some of losses (seen in previous two sessions) on Wednesday following upside in global peers on reports that Federal Open Market Committee (FOMC) may keep low rates till June 2015 and on likely stimulus for China’s top banks.

The 30-share BSE Sensex climbed 138.78 points to close at 26631.29 and the 50-share NSE Nifty rose 42.60 points to 7975.50.  The broader markets too gained with the BSE Midcap and Smallcap indices rising 0.3 percent each.

Experts see some volatility in short term on account of global cues but in the medium to long term, the upside may continue.

Adrian Mowat, chief Asian economist, JP Morgan prefers Indian market among other emerging markets (EMs) and believes it’s the most compelling story among the BRIC nations too (Brazil, Russia, India, China and South Africa).

Mowat says the markets are likely to rally further as he sees a significant fall in inflation in the next year.

Sanjay Sinha, Founder, Citrus Advisors sees the Nifty hovering in 7,850-8,150 range in near term but in the long run, he sees the Sensex and Nifty heading to 35,000 and 11,000 respectively, by December 2015.

Global markets too saw buying interest ahead of outcome of two-day FOMC meeting tonight. Asian markets (except Nikkei) closed 0.5-1 percent higher following gains in US stocks as report suggested that Federal Reserve may not raise rates till June 2015 (as against expectations of rate hike sooner than anticipated earlier) and People’s Bank of China may inject USD 500 billion into top five banks. European markets were up 0.3-0.7 percent (at 16:15 hours IST).

Benoit Anne, Managing Director, Head of EM Strategy, Societe Generale believes the stimulus will not be removed and the message “will continue to be on the relatively dovish side and that will ultimately be positive for the risky assets, including the global emerging markets assets.”

Back home, Infosys, Dr Reddy’s Labs, BHEL and Tata Power were top gainers on the Sensex, up over 2 percent followed by TCS, Tata Motors, Hero Motocorp, Tata Steel and Wipro with over a percent gain.

Cairn India was up 1.4 percent on three new oil discoveries in Rajasthan block whereas Cipla fell 1.6 percent as Nomura downgraded the stock to reduce with a price target of Rs 569, citing valuation seems expensive.

Shares of HDFC Bank, Sun Pharma, Coal India, HUL and Sesa Sterlite declined 0.4-1.3 percent.

In the broader space, HFCL, NBCC, Manappuram Finance, NOCIL, NCC, Kalyani Steel, Arvind, ABB India, Bharti Infratel, Hexaware, Jammu and Kashmir Bank and Man Industries rallied 3-19 percent.

However, Reliance Communications, Indian Hotels, GE Shipping, Bata India, Bajaj Finance, Sun TV and Torrent Power declined 2-4 percent.

The market breadth was positive as about 1532 shares advanced while 1483 shares declined on the Bombay Stock Exchange.

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