Markets bounce back on fag-end buying in RIL, ITC

Mumbai, Equity benchmark indices closed higher on Wednesday, helped by fag-end buying in index majors Reliance Industries, ITC and M&M amid a positive start in European markets. Cautious trade prevailed in the markets for the most part of the day ahead of two major events — the RBI’s monetary policy and the US inflation data — due to be announced on Thursday.

The 30-share BSE Sensex climbed 149.31 points or 0.23 per cent to settle at 65,995.81. During the day, it fell by 402.12 points or 0.61 per cent to 65,444.38. The benchmark also touched a high of 66,066.01.

The NSE Nifty gained 61.70 points or 0.32 per cent to end at 19,632.55.

“Markets staged a smart recovery in the late trading session after two days of weakness, as strength in European indices and sharp gains in metals, oil & gas and auto stock aided sentiment.

“Markets were highly volatile as investors shunned local equities after Moody’s warned of downgrading six major US banks, while weak Chinese exports data also dampened sentiment,” said Shrikant Chouhan, Head of Research (Retail), Kotak Securities Ltd.

JSW Steel was the biggest gainer on the Sensex chart, rising 2.68 per cent, followed by Tata Motors, Mahindra & Mahindra, Tata Steel, Titan, ITC, Tech Mahindra, NTPC, Reliance Industries and Larsen & Toubro.

In contrast, Bajaj Finance, Maruti, ICICI Bank, Power Grid, Asian Paints and Axis Bank were major laggards.

In the broader market, the BSE smallcap gauge climbed 0.57 per cent, and the midcap index advanced 0.39 per cent.

Among the indices, metal jumped 2.32 per cent, consumer durables climbed 1.21 per cent, oil & gas (1.16 per cent), energy (1.11 per cent), commodities (0.82 per cent), industrials (0.76 per cent), auto (0.74 per cent) and FMCG (0.61 per cent).

On the other hand, Financial Services, bankex and realty were the laggards.

“The domestic market started adopting a defensive stance as investors awaited crucial inflation data for India and the US. The deflationary trend in China and the downgrade of the US mid and small-sized banks affected the market sentiment.

“However, a late recovery in the domestic market was supported by a positive uptick in the European market and hope of an optimistic RBI policy not impacting domestic economic growth,” said Vinod Nair, Head of Research at Geojit Financial Services.

In Asian markets, Tokyo and Shanghai settled lower, while Seoul and Hong Kong ended in the green.

European markets were trading in positive territory. The US markets ended in the negative territory in overnight trade on Tuesday.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 711.34 crore on Tuesday, according to exchange data.

Global oil benchmark Brent crude climbed 0.79 per cent to USD 86.85 a barrel.

The rupee appreciated by 5 paise to settle at 82.86 (provisional) against the US dollar on Wednesday.

“As expected, Indian equities are consolidating given the cautious global scenario and consistent selling by FIIs. Tomorrow, we expect the market to see some volatility as the RBI will announce its policy decision outcome on the weekly F&O expiry day. Further, the RBI’s commentary would be largely tracked to understand their future course of action,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.