The market geared up for the much awaited US Federal Reserve’s two-day meet outcome due on Thursday as equity benchmarks rallied one percent Wednesday driven by banking & financials. However, the broader markets underperformed benchmarks.
The 30-share BSE Sensex failed to hold 26000-mark, rising 258.04 points to 25963.97 after hitting an intraday high of 26006.75. The 50-share NSE Nifty ended tad below 7900 level, up 70.05 points at 7899.15 after seeing day’s high of 7913.90. However, the BSE Midcap index lost 0.17 percent and Smallcap declined 0.44 percent.
Analysts remained divided on whether the US Federal Open Market Committee will lift short-term interest rates on September 17. Majority of experts feel the Federal Reserve may hold rates on September 17 but they don’t rule out surprise rate hike.
Keith Parker, Barclays expects the Fed to remain on hold at its meeting, deferring rate hikes while it assesses downside risks to the outlook after recent financial market stress.
Also read – Nifty to take US Fed rate hike in its stride: Edelweiss
He expects Fed Chair, Yellen to emphasise data-dependence but he believes concerns about external demand and inflation will delay hikes until March 2016.
Globally, Asian markets ended higher with the Shanghai rising 4.91 percent. Hang Seng gained 2.4 percent and Nikkei rose 0.8 percent. Rating agency Standard & Poor’s has slashed Japan’s ratings to A+ from AA- with the outlook remaining stable.
European markets too joined the party. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.5-1.2 percent (at 16 hours IST).
Indian stock markets will remain shut on Thursday for Ganesh Chaturthi holiday.
Back home, banks remained strong today with the Bank Nifty rising 1.35 percent. HDFC Bank, ICICI Bank, Axis Bank and State Bank of India climbed 1-2 percent. Axis Bank MD & CEO Shikha Sharma says the bank will only lower lending rates when its own cost of funds comes down.
Sun Pharma surged 2.4 percent after it acquired Insite Vision for a total equity value of USD 48 million. Acquisition will help Sun build up its branded ophthalmology portfolio in the US.
Tata Motors gained more than 1 percent despite brokerage Deutsche Bank downgraded the stock to hold and slashed target price by 21 percent to Rs 375 apiece citing JLR’s weak volume and mix in China.
Engineering and construction major Larsen & Toubro declined 0.6 percent despite bagging international EPC order worth Rs 1,700 crore for 400 MW gas based power plant in Bangladesh.
Tata Steel advanced half a percent on getting Environment Ministry’s approval for more than doubling capacity of its Jamshedpur-based cold rolling mill.
Among others, ITC, HDFC, Bharti Airtel, Wipro, Hero Motocorp, Bajaj Auto, Vedanta and Hindalco were prominent gainers with 1-2.5 percent upside while BHEL and Dr Reddy’s Labs lost more than 0.6 percent.
In new listing, Sadbhav Infrastructure Project closed at Rs 106.15 today, up 3 percent over its issue price of Rs 103 after opening at Rs 111.
In the broader space JMC Projects surged 14.4 percent on securing orders worth Rs 702 crore from Bihar and Karnataka. Suven Life Sciences climbed 4 percent on getting three product patents in Canada and China. Orchid Chemicals gained nearly 3 percent as it is currently in talks with banks to explore possibility of converting its rupee debt into dollar denominated debt for cutting down interest burden.
However, Amtek Auto lost 5 percent after rating agency Standard & Poor’s downgraded subsidiary Amtek Global Technologies’ senior secured term loans worth 235 million euro and a 30 million euro revolving credit facility to CCC+ from B+ and placed on credit watch.