Ignoring sluggish global cues, the benchmark BSE Sensex today regained the 27,000 level by surging 283 points on Federal Reserve’s dovish stance on interest rate, above-normal progress in monsoon and strengthening of rupee.
The BSE barometer has gone up by 745 points in the last five sessions and now stands at over two-week high levels.
In a two-day monetary policy meet concluded yesterday, the US Federal Reserve Chairwoman Janet Yellen left key interest rates unchanged near zero.
Market Outlook by Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services
Surprisingly India rallied ahead from the breather seen yesterday from FOMC meet and commodity prices, in spite of consolidation in rest of the world today. Domestically few factors have helped to improve the sentiment like better than expected monsoon, CPI numbers and increase in MSP, thus provide support near 8000.
“…although policy will be data-dependent, economic conditions are currently anticipated to evolve in a manner that will warrant only gradual increases in the target federal funds rate,” Yellen said.
Above-normal progress in monsoon, rise in the rupee by 34 paise to 63.78 in late afternoon deals supported the rally.
“Indices continue to stay cheerful with the Fed meet outcome of keeping interest rate unchanged. Strengthening of rupee to a three-month strong level cheered the sentiment,” said Gaurav Jain, Director of Hem Securities.
Market Wrap Up by Alex Mathews, Head Research, Geojit BNP Paribas Financial Services Ltd
The domestic markets today opened with a positive note and remained throughout in the higher territory on the back of easing concerns of monsoon and a possible interest rate hike in US.
The Rupee today appreciated against dollar after the FOMC statement that hike in interest rate would be appropriate when the labour market improves and the inflation likely to rise.
Nifty closed at 8174 up around 83 points. The market breadth stood positive as there were seen 1632 stocks advancing against 1100 stocks declining. The Nifty volatility index, India VIX stood at 16.0150 down around 4.25%. The mid-cap and small cap index closed up around 0.80% and 1.07% respectively.
Barring the Realty and metal sectors, which closed down around 0.21% and 0.19% respectively all other sector ended in green. The major gainers for the day were Oil & gas and Consumer Durables which ended up around 2.63% and 2.12% respectively.
In the stocks’ front, the major gainers were Reliance and Lupin which closed up around 5.25% and 4.52% respectively whereas the selling was seen in ZEEL and Tech Mahindra, which closed down around 1.67% and 1.31% respectively.
The FIIs were sellers in the cash market segment on 17 June 2015, Wednesday, sold shares worth Rs 940.91 crore. The DIIs on the other hand were buyers on 17 June, bought shares worth Rs 1447.07 crore in the capital markets segment.
The European markets saw a sell off on the ongoing concerns regarding the Greece. The US index futures were also down.
The 30-share BSE gauge opened on a strong footing and picked up momentum on sustained across-the-board buying to reclaim the 27,000-mark and touched high of 27,175.39.
The index finally settled 283.17 points higher or 1.06 per cent at 27,115.83.
The 50-share NSE Nifty index recaptured the 8,100-mark by rising 83.05 points or 1.03 per cent to close at 8,174.60.
Among Sensex gainers, RIL topped the list by climbing over 5 per cent on continued optimism about the company’s plans to start 4G phone services later this year.
Market View by Anand James, Co Head Technical Research Desk, Geojit BNP Paribas
A relatively dovish statement from US FOMC allows Indian stocks some more freedom to push higher, but Fed Chairman’s stress on being data dependent, keeps alive the possibility of atleast one hike this year. In either case, economic scenario in US, or for that matter Europe suggest that the potential for sustained hike in rates is remote. This would also mean that sooner than later, Indian market’s focus would revert to domestic scenario sooner than later. The marginal increase in the MSP for rice and plan to help rural help producers, come at a point when concerns over monsoons linger on. The relatively higher increase in MSP for pulses was also noteworthy as a measure to increase acreage, as we are net importers of edible oils.
Gains were also aided by oil&gas, consumer durable, healthcare, auto, capital goods and banking stocks.
Globally, Asian stocks closed mixed with downward bias on receding hopes of a deal between Greece and its creditors at a summit late in the global day today. European markets too showed feeble trend in mid-session deals. Key indices from China, Hong Kong, Japan and Singapore ended weak, while from South Korea and Taiwan concluded with gains. Chinese Shanghai Composite Index plunged 3.67 per cent.
In Europe, key index from France was down by 1.37 per cent, Germany by 1.36 per cent and the UK by 0.73 per cent.
Back home, foreign investors pulled out Rs 940.91 crore yesterday, as per provisional data.
Market View by Gaurav Jain, Director, Hem Securities
Indices continue to stay cheerful with the Fed meet outcome of keeping interest rate unchanged. Strengthening of rupee at a 3-month strong level cheered the sentiment. Banking & financials, oil & gas, technology, auto and FMCG stocks led the rally on the bourses.
Overall, 22 out of 30-share Sensex scrips closed with gains, while Tata Power ended steady today.
Major gainers were Tata Motors 2.71 per cent, ONGC 2.16 per cent, Maruti Suzuki 1.82 per cent, Dr Reddy’s 1.49 per cent, Sun Pharma 1.40 per cent, Hindalco 1.31 per cent, Bharti Airtel 1.29 per cent, HDFC Bank 1.28 per cent, SBI 1.16 per cent and HDFC 0.85 per cent.
The market breadth remained favourable as 1,548 stocks ended in the green, 1,188 closed in the red and 110 ruled steady.
Total turnover declined to Rs 2,999 crore from Rs 3,119.62 crore yesterday.
Asia stocks up, dollar sags as Fed tempers expectations for rate rise
Reuters – An index of Asian shares gained on Thursday while the dollar eased slightly after the Federal Reserve signalled that interest rates would rise more slowly than markets had expected.
Spreadbetters, however, expected Greek debt matters to reclaim the spotlight in Europe ahead of the euro zone finance ministers’ meeting later in the day. They forecast a lower open for Britain’s FTSE, Germany’s DAX and France’s CAC.
After a closely-watched two-day meeting, the Fed said the economy was likely strong enough to support an interest rate increase by the end of the year. But it lowered its forecasts for 2015 economic growth because of a weak start to the year and reduced its federal funds rate forecast.
MSCI’s broadest index of Asia-Pacific shares outside Japan climbed about 0.3 percent, while Japan’s Nikkei skidded 0.8 percent to a one-week low as the yen gained against the dollar.
“The market is rather concerned about the U.S. economic view in the future,” said Masaru Hamasaki, head of the market and investment information department at Amundi Japan.
South Korean shares were poised to post their sharpest daily gain in four weeks, with the Korea Composite Stock Price Index rising 0.7 percent.
Some of the region’s other shares did not fare as well, with Chinese shares coming under pressure from a string of initial public offerings, while Australian stocks shed 1.6 percent amid selling by investors before closing their books at the end of the month.
On Wednesday, Wall Street shares inched higher in a choppy session following the Fed’s statements, with the Dow rising 0.17 percent and S&P gaining 0.2 percent.
The Fed’s stance had tripped up some investors who had expected the central bank to signal a rate hike as early as September.
U.S. Treasury yields, which had reached eight-month highs last week, fell back and decreased the dollar’s appeal, pressuring it against many of its peers. The benchmark 10-year note yield fell to 2.32 percent from 2.39 percent before the Fed statement was released, and was at 2.27 percent in Asian trading.
The dollar index was down 0.2 percent at 94.088 after losing 0.8 percent in the previous session.
The dollar skidded about 0.3 percent on the day to 123.01 yen, down from its overnight high of 124.465 yen, while the euro rose about 0.2 percent to $1.1362, adding to the previous day’s 0.8 percent rise.
“Expectations were high going into the monetary policy announcement and unfortunately for dollar bulls hoping for a sharp upside breakout, (Fed Chair) Janet Yellen failed to deliver,” Kathy Lien, managing director of FX Strategy for BK Asset Management, wrote.
“Investors were hoping for a clear road map for lift off but she did not even mention that the chance of a September rate hike has strengthened.”
It was a different story for sterling, which soared overnight after robust British wage growth data supported the case for a rate hike by the Bank of England.
The pound touched a new seven-month high of $1.5852 in Asia, and was last at $1.5836.
In commodities trading, crude oil futures slipped after U.S. government data showed that gasoline stocks and distillate inventories rose last week, although falls were checked by the weaker dollar and continuing fears of unrest in the Middle East.
Brent crude dipped 0.3 percent to $63.71 a barrel, while U.S. crude also fell about 0.5 percent to $59.65.
Spot gold, another beneficiary of the greenback’s weakening following the Fed meeting, was up about 0.2 percent at $1,187.35 an ounce.
With PTI inputs