Less chance of US rate hike boosts markets; Sensex up 230 points (Roundup)

Mumbai, Oct 15 (IANS) Lowered chances of a US rate hike, buoyant global markets and rising rupee value propelled a barometer index of the Indian equity markets to gain 230 points or 0.86 percent on Thursday.

The Indian equity markets made gains after three consecutive sessions of losses which came in the wake of disappointing quarterly results and negative sentiments emanating from the Chinese markets.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE) lost 300 points in the last three consecutive sessions.

Initially, both the bellwether indices opened on a positive note on easing concerns of a rate hike in US in October and supportive Asian markets.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) made substantial gains during the day’s trade. It closed higher by 72 points or 0.88 percent at 8,179.50 points.

The S&P BSE Sensex, which opened at 26,842.19 points, closed at 27,010.14 points — 230.48 points or 0.86 percent higher from its previous close at 26,779.66 points.

The Sensex touched a high of 27,037.95 points and a low of 26,836.77 points during the intra-day trade.

The barometer index closed on Wednesday at a loss of 66.87 points or 0.25 percent.

Analysts pointed out that Indian markets finally closed in the green after closing negative for three straight sessions, led by strong positive cues from Europe and Asia.

“Poor US retail sales data, coupled with lower than expected inflation, increased doubts about whether the Federal Reserve (US Fed) will raise interest rates this year,” Vaibhav Agrawal, vice president, research, Angel Broking, told IANS.

The US Fed is slated to conduct its Federal Open Market Committee (FOMC) meet on October 27-28.

The FOMC assumes significance as higher interest rates in the US are expected to lead away FPIs (Foreign Portfolio Investors) from emerging markets such as India.

Agrawal said the quarterly results will be key driver for markets over the coming weeks.

“Reliance is set to announce numbers this week, which will be one trigger, investors will watch out for. Investors will also look at US industrial production and CPI (consumer price index) numbers for further cues on the rate hike,” Agrawal added.

Shreyash Devalkar, fund manager, equities, BNP Paribas Mutual Fund said that Indian indices opened the trading day on a positive note, as they took cues from gains in Asian markets which was led by China amid signs of fresh reforms for Chinese state owned firms.

In Asian markets, Japan’s Nikkei closed the day’s trade up 1.15 percent while Hong Kong’s Hang Sang rose 2.00 percent. China’s Shanghai Composite index increased by 2.32 percent.

Both the domestic institutional investors (DIIs) and foreign institutional investors (FIIs) were net buyers in the day’s trade.

According to data with stock exchanges, the DIIs bought stocks worth Rs.291.73 crore and the foreign institutional investors (FIIs) picked up stocks worth Rs.102.21 crore in the day’s trade.

Furthermore, the Indian rupee strengthened in the day’s trade. It closed the day’s trade up 22 paise at 64.82 (64.8175) to a US dollar from its previous close at 65.04 to a greenback.

Nitasha Shankar, vice president, research with YES Securities, told IANS: “All major indices ended trade with gains. Maximum gains coming in the media, auto, metal and public sector undertaking (PSU) banks space.”

“Market breadth remained positive throughout the day favouring the bulls. However, volumes continue to remain thin suggesting lack of participation,” Shankar said.

Sector-wise, only S&P BSE information technology (IT) index closed in the red. It slipped by 14.95 points.

The S&P BSE automobile index augmented by 417.16 points, capital goods index gained by 191.74 points, banking index surged by 178.34 points, oil and gas index rose by 136.88 points and metal index was higher by 105.33 points.

Major Sensex gainers during Thursday’s trade were: Tata Motors, up 8.06 percent at Rs.380.70; BHEL, up 3.02 percent at Rs.211.70; Maruti Suzuki, up 3.01 percent at Rs.4,379.85; Tata Steel, up 2.94 percent at Rs.255.30; and Hero MotoCorp, up 2.46 percent at Rs.2,567.45.

The major Sensex losers were: Mahindra and Mahindra, down 0.86 percent at Rs.1,274.95; Wipro, down 0.86 percent at Rs.577.65; Hindalco Industries, down 0.85 percent at Rs.87.95; Hindustan Unilever, down 0.84 percent at Rs.790.70; and Cipla, down 0.83 percent at Rs.672.60.

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