Lowered chances of US rate hike buoys markets; Sensex gains 234 points (Roundup)

Mumbai, Oct 9 (IANS) Lowered chances of a US rate hike this month cheered investor sentiments and propelled a barometer index of the Indian equity markets to gain 234 points or 0.87 percent on Friday.

The wider 50-scrip Nifty of the National Stock Exchange (NSE) gained 60.35 points or 0.74 percent at 8,189.70 points.

The barometer 30-scrip sensitive index (S&P Sensex) of the Bombay Stock Exchange (BSE), which opened at 26,974.92 points, closed at 27,079.51 points — 233.70 points or 0.87 percent up from its previous close at 26,845.81 points.

The Sensex touched a high of 27,200.44 points and a low of 26,910.59 points in the intra-day trade.

The Sensex edged-higher in the day’s trade a session after profit booking, weak global cues and caution over the upcoming quarterly results arrested its six-day upward streak.

The Indian equities’ barometer index had receded by 190 points or 0.70 percent on Thursday.

Analysts said the markets made gains on the back of dovish FOMC (Federal Open Market Committee) minutes. The US Fed’s FOMC minutes which were released on late Thursday indicated lower chances of a rate hike in October.

The FOMC minutes were of the September 16 meeting in which the US Fed decided not to hike lending rates.

The US Fed is slated to conduct its FOMC meet on October 27-28.

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

“The markets rose on the back of dovish FOMC minutes which lowered the chances of an October rate hike there. The Bank of England’s monetary policy decision too uphold the current lending rates also cheered the markets and gave a positive cue,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agrawal, vice president, research, Angel Broking, told IANS: “The High court’s verdict in favour of Vodafone has sent out a positive signal among foreign institutional investors (FIIs).”

The rupee too made gains after the FOMC minutes were released. It closed with gains of 31 paise at 64.74 to a US dollar from its previous close of 65.05-06 to a greenback on Thursday.

“Yesterday’s FOMC minutes indicated that the authority (US Fed) is in no hurry to raise rates… this hurt dollar demand,” Hiren Sharma, senior vice president, currency advisory at Anand Rathi Financial Services, told IANS.

The foreign investors were net buyers in the day’s trade.

According to data with stock exchanges, the FIIs were bought shares worth Rs.483.86 crore in the cash market segment on Friday.

Nitasha Shankar, vice president, research with YES Securities, told IANS: “Broader markets under-performed the headline index as profit booking was seen in the high beta stocks.”

“Sugar and metal stocks extend their gains, outperforming all other sectors for the entire week. Tech stocks witnessed buying interest ahead of their results, while PSU (public sector undertaking) banks and energy stocks underwent profit booking,” She said.

Sector-wise, information technology (IT), banking, capital goods, technology, entertainment and media (Teck), automobile and healthcare stocks witnessed healthy buying.However, consumer durables, power and oil and gas index ended in the red.

The S&P BSE IT index augmented by 171.35 points, banking index gained by 101.83 points, capital goods index rose by 88.54 points, Teck index soared by 80.09 points, automobile index increased by 75.81 points and healthcare index edged-higher by 68.04 points.

The S&P BSE consumer durables index fell by 20.78 points, power index tumbled by 1.91 points and oil and gas index slipped by 1.08 percent.

Major Sensex gainers during Friday’s trade were: Vedanta, up 11.58 percent at Rs.103.60; Tata Steel, up 4.26 percent at Rs.250.75; Tata Motors, up 3.81 percent at Rs.355.90; Infoysis, up 3.13 percent at Rs.1,167.85; and ICICI Bank, up 2.75 percent at Rs.286.10.

The major Sensex losers were: Coal India down 3.05 percent at Rs.335.65; Maruti Suzuki, down 1.87 percent at Rs.4,272.80; Sun Pharma, down 1.00 percent at Rs.906.35; BHEL, down 0.88 percent at Rs.202.05; and Hindustan Unilever, down 0.51 percent at Rs.817.20.

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