Indian markets put on a good show today with Sensex recovering from over 1-month lows and the rupee appreciating 11 paise against the dollar as a batch of tepid US economic data triggered hopes Fed will not raise rates soon.
However, gold prices declined in the Rs 100-140 range in Mumbai, Chennai and Kolkata while in national capital the precious metal fell by Rs 185 to over 3-month low of Rs 26,165 per 10 grams on low local demand and weak global cues.
The 30-share BSE Sensex, which plunged to one-month low in yesterday’s trade, staged a strong comeback to settle 298.67 points, or 1.05 per cent, higher at 28,736.38.
The gauge had lost nearly 492.70 points in the previous two sessions after rising inflation dashed hopes of aggressive rate cuts by the RBI.
The 50-share NSE Nifty closed above the key 8,700-level by surging 90.15 points, or 1.04 per cent, to 8,723.30 today.
Experts say markets are likely to remain range-bound. “Earnings are yet to pick-up. In the near-term, we expect markets to consolidate. We see markets moving in 8,500-9,000 range,” said B Gopkumar, Executive Vice-President and Head (Broking) at Kotak Securities.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Market has found immediate support at 8600-8650 level in its current consolidation phase. Positive global market ahead the crucial FOMC meet has added sentiment to the market today. Market is looking forward at Land and Coal bills getting passed in the ongoing budget session. As the houses will go in recess from 20th March till 19th April, risk to pass Land Bill before the expiry of ordinance on 5th April has increased. Hence, until more clarity comes from the ongoing budget session, market will continue its consolidation.
Most Asian indices closed in the green. The Nikkei (1%), Kospi (2.1%), Shanghai Composite (1.6%) and Taiwan Taiex (0.3%) closed higher. Hang Seng (-0.2%) and Straits Times (-0.2%) ended lower.
Small-cap and mid-cap shares also gained on demand from retail investors with indices gaining up to 0.57 per cent.
Stocks rose after a two-day downward trend largely on emergence of buying, tracking a firming trend in overseas markets as tepid US manufacturing data triggered hopes that Fed will decide against any early hike in interest rates.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
Tracking the global cues and strong advance tax numbers, the markets opened higher, but profit booking trimmed its earlier gains. Surprisingly the closing session of the market witnessed smart recovery led by Pharma, auto and selected private sector banks. Going forward backing sector stocks may get more attention due to oversold situation.
Nifty closed at 8723 up around 90 points. But the market breadth stood negative as there were seen 1359 stocks advancing against 1454 stocks declining. The Nifty volatility index, India VIX stood at 15.1275 down around 0.32%.
The mid-cap and small-cap sectors ended in green, up around 0.57% and 0.20% respectively.
Barring the IT sector which ended lower 0.32%, all other sectors ended in green. The major gainers were Healthcare and Capital goods which ended up around 1.82% and 1.70% respectively.
In the stocks’ front, the gainers were Hindalco and SSLT which closed up around 5.48% and 4.31% respectively whereas the losers were Jindal steel and HCL Tech which closed down around 8.37% and 0.97% respectively.
The FIIs were sellers in the cash markets segment, sold shares worth Rs 762.55 crore on Monday, 16 March 2015. On the other hand the DIIs were net buyers on 16 March 2014, bought shares worth Rs 158.65 crore as per the provisional data from the stock exchanges.
The European markets were little changed and the US index futures were also up. The investors focus is now seem to be shifted towards the Federal Reserve’s meeting which starts today.
Back home, among individual stocks, shares of Jindal Steel and Power closed 8% lower amid media reports that Government may reject the company’s bids for 2 coal blocks in Chhattisgarh.
Shrikant Chouhan, Head-Technical Research, Kotak Securities
Today’s activity clearly indicates that markets have formed short term bottoming out formation and is ready to retrace recent sell off which was between 9120 and 8610. Technically, we can expect minimum 8840/8860 on the higher side. The weakest sector Bank did extremely well and closed at day’s highest level. Pharmaceutical stocks have outperformed in the recent correction and we are of the view that we should look for adding mid cap stocks from the same space with a medium term view. We are expecting global cues to remain neutral to positive as ahead of the US Federal meet the data is suggesting at delay in rate hike, which is positive for emerging markets.
Among metal stocks, Hindalco (5.4%), Sesa Sterlite (4.2%) and Tata Steel (2%) closed higher amid hopes of a Chinese stimulus package to revive the economy.
Among sectoral indices, BSE Healthcare (1.8%), BSE Capital Goods (1.7%) and BSE FMCG (1.5%) closed higher.
Market participants would be closely monitoring the Federal Open Market Committee’s (FOMC) 2-day meeting, which begins today.
Vineeta Mahnot, Equity Research Analyst, Hem Securities
Markets managed to end positive after witnessing extreme volatility. Indices swung wildly between positive and negative zones eyeing Fed meet which begins today. Sensex shut the day higher by about 300 points or 1% at 28736. Capital goods, FMCG, Oil & Gas, Consumer Durables and select auto were the supporters for the day while IT and select telecom were among the draggers. Hindalco Industries topped the buying list with about 6% gains followed by Sesa Sterlite, Dr. Reddy Laboratories, HDFC, Tata Motors and BHEL. Infosys, Coal India, Tata Power, Bharti Airtel and Wipro were on the loser’s side. The broader indices underperformed the Sensex with mild gains between 0.2%-0.6%. Market breadth was negative with 1364 advances against 1444 declines on the BSE.
The Fed’s 2-day monetary policy meet begins later tonight.
The rupee also appreciated for the second day on sustained dollar selling by exporters, amid talk of capital inflows.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced better at 62.77 a dollar from last close of 62.81. It then moved in a range of 62.67 and 62.78 before finishing at 62.70 per dollar, showing a gain of 11 paise or 0.18 per cent. It has now gained 27 paise in 2 days.
Market experts said Indian stocks and the local currency could see pick up in foreign fund inflows if the US central bank decides against the hike in rate cut at its two-day meet.
Globally, most Asian markets closed mixed and European indices were trading firm in their early trade.
In Singapore, gold fell 30 cents to USD 1,154.51 an ounce and silver by 0.4 per cent to USD 15.58