Value buying, GST hopes propel markets, Sensex up 174 points (Roundup)

Mumbai, Dec 16 (IANS) Ahead of a likely US rate hike, a barometer index of the Indian equity markets gained 174 points on Wednesday, as value buying and government’s efforts to iron out differences on a key economic legislation cheered investors.

Initially, too, both the bellwether indices of the Indian equity markets opened on a positive note in sync with their Asian peers.

In addition, investors seem to have priced-in the possibility of a 25 basis points hike in key US interest rates. The hike is expected to be announced by the US Fed’s Federal Open Market Committee (FOMC) early Thursday, India time.

A hike in US interest rates, which have been at near-zero levels since the last decade, will lead to a massive pull-back of foreign funds from emerging economies like India.

It is also expected to dent business margins as access to capital from the US will become costlier.

Apart from factoring in a US rate hike, the government’s attempts to build a consensus on the GST (Goods and Services Tax) bill restored investors confidence.

Finance Minister Arun Jaitley said that the government is prepared to let go off the additional one percent tax proposed under the GST regime, rekindling hopes that the bill might finally get cleared by the parliament during the winter session.

Besides GST, markets rose on the back of value buying and increase in investor-participation.

The barometer 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) closed the day’s trade up 174 points.

Similarly, the wider 50-scrip Nifty of the National Stock Exchange (NSE) gained during the day’s trade. It closed higher by 50 points or 0.65 percent at 7,750.90 points.

The Sensex of the S&P Bombay Stock Exchange (BSE), which opened at 25,402.47 points, closed at 25,494.37 points — up 173.93 points or 0.69 percent from the previous day’s close at 25,320.44 points.

The Sensex touched a high of 25,572.90 points and a low of 25,372.47 points during the intra-day trade.

On Tuesday, the Sensex gained by 170.09 points or 0.68 percent, while the Nifty rose by 50.85 points or 0.66 percent.

“Thinner volumes moved the markets higher. The recent relief rally has encouraged investors to take risk and chase prices. We observed value buying at lower levels,” Anand James, co-head, technical research desk with Geojit BNP Paribas Financial Services, told IANS.

Vaibhav Agarwal, vice president and research head at Angel Broking, told IANS that global investors continue to await the rate hike decision from the US Fed.

“We expect the Fed will be very careful in managing street expectations and will hike rates in a very gradual manner, possibly spread out over years,” Agarwal said.

The foreign institutional investors (FIIs) were net sellers in the day’s trade, whereas the domestic institutional investors (DIIs) were net buyers.

According to data with stock exchanges, FIIs sold stocks worth Rs.503.22 crore, while DIIs invested Rs.1,024.03 crore.

Nitasha Shankar, vice president for research with YES Securities, said that the Indian markets maintained its upward trajectory, ending on a positive note for third consecutive day, ahead of the US Fed meet tonight.

“Broader markets, however, gave up partial gains to end trade marginally higher underperforming the headline index. Market breadth, though, ended favouring the bulls with 1,432 advances and 1,273 declines,” Shankar told IANS.

“All major sectors ended in the green, barring the auto and FMCG (fast moving consumer goods) stocks.”

Sector-wise, healthy buying was witnessed in banking, oil and gas and information technology (IT) sectors.

On the other hand, automobile, consumer durables and FMCG scrips ended in the red.

The S&P BSE banking index augmented by 217.47 points, oil and gas index gained by 155.36 points and IT index was higher by 116.25 points.

The S&P BSE automobile index was receded by 91.62 points, consumer durables declined by 69.82 points and FMCG index was lower by 45.17 points.

Major Sensex gainers during Wednesday’s trade were ONGC, up 3.99 percent at Rs.226.55; Bharti Airtel, up 3.83 percent at Rs.320.20; ICICI Bank, up 2.29 percent at Rs.252; Lupin, up 2.03 percent at Rs.1,826.45; and NTPC, up 1.75 percent at Rs.133.70.

The major Sensex losers were Mahindra and Mahindra, down 5.44 percent at Rs.1,218.90; ITC, down 0.96 percent at Rs.319.50; Wipro, down 0.64 percent at Rs.555; Hindalco Industries, down 0.32 percent at Rs.78.55; and Hindustan Unilever, down 0.30 percent at Rs.853.75.

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