The BSE Sensex today rose over 350 points in early trade after a dovish Fed stance cooled expectations of an early US rate hike but the benchmark ended with over 152-point loss on a late sell-off in banking, capital goods and oil & gas bluechips.
Shares of Axis Bank, SBI, ICICI Bank, BHEL, RIL and ITC saw moderate to sharp losses, leading to the BSE index falling for the second straight session.
In Asia, barring Japan, country-specific indices in all major markets rose in a relief rally as the Federal Reserve , after a closely watched two-day meeting issued a statement that had removed a pledge to remain “patient” on raising rates, signaling a possible mid-year rate increase.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
At the start of the day India witnessed a cascading benefit from the positive FOMC meet. All developed and Emerging Markets have taken a positive impact from the meet. India has come back to the important domestic factors like development at budget session and downgrading of Q4FY15 expectation. Unless postponed, tomorrow is the last day for the 1st shift of budget session. Market will look at the immediate stanza of post budget reforms. Land & Coal Bill is amongst the important part of same.
However, Fed chief Janet Yellen emphasised that while jobs were picking up the economy was more muted than 3 months ago, adding that consumer spending slipped and inflation slowed.
The 30-share Sensex had risen to a day’s high of 28,978.74 in early trade and remained in the green for a major part of the session amid a firming global cues.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services
The Indian markets opened with a positive note following the global cues. The positive outlook was after the FED’s monetary meeting. US central Bank said that it is not in a hurry to increase interest rates as long as inflation was tame and economic growth moderate. In the second half market witnessed profit booking and finally closed in the negative territory.
Nifty closed at 8634 down around 51 points. The major selling were witnessed in the sectors like Banking and Realty which ended lower around 1.76% and 1.50% respectively. Mild buying was seen in Consumer Durables and Healthcare which ended up around 0.48% and 0.42% respectively.
The market breadth was negative as there were seen 1105 stocks advancing against 1723 stocks declining. The Nifty volatility index, India VIX stood at 15.1975 down around 2.03%.
The mid-cap and small-cap sectors ended down around 0.59% and 0.58% respectively.
In the stocks’ front, the losers were PNB and Bank of Baroda which closed down around 4.18% and 3.79% respectively whereas the gainers were Lupin and Asian Paint which closed up around 2.85% and 2.58% respectively.
The FIIs were sellers in the cash markets segment, sold shares worth Rs 457.43 crore on Wednesday, 18 March 2015. On the other hand the DIIs were also net sellers on 18 March 2014, sold shares worth Rs 882.99 crore as per the provisional data from the stock exchanges.
The European markets are trading higher near the highest level after the Federal Reserve’s meeting. The US index futures were also trading mixed.
However, a late sell-off by participants dragged down the Sensex to touch the day’s low of 28,411.70 points. It closed with a loss of 152.45 points, or 0.53 per cent, at 28,469.67. The gauge lost 114.26 points yesterday in a volatile trade.
“Despite positive global cues, equity benchmarks concluded the session with a cut. They failed to capitalise the initial push, which was triggered in response to the US Fed’s balanced statement on interest rate hike,” said Jayant Manglik, President-retail distribution, Religare Securities.
The 50-share NSE Nifty ended with a loss of 51.25 points, or 0.59 per cent, to settle at 8,634.65 after touching the day’s high of 8,788.20 and a low of 8,614.65.
Dipen Shah, Head of PCG (Private Client Group) Research, Kotak Securities
Markets opened higher on the back of strong US markets. The Fed’s announcement on not hiking rates in April and keeping future hikes data dependent, buoyed sentiments. Increase in interest rates in US can have an impact on the Indian currency as well as stock markets as funds may flow out of India or additional funds may not come into India. We believe that, going ahead, fiscal reforms by the Government will be the triggers for the markets to sustain and move higher from current levels.
Sectorwise, the BSE Banking index suffered the most by losing 1.76 per cent, followed by Realty (1.50 per cent), Capital Goods (1 per cent), Oil & Gas (0.68 per cent), FMCG (0.64 per cent) and Power (0.52 per cent).
Meanwhile, Foreign Portfolio Investors (FPIs) sold shares worth a net Rs 457.43 crore yesterday, as per provisional data released by the stock exchanges.