 "Indian bourses eyeing Fed meet, F&O expiry")
Analysts said the Indian markets are also taking positive cues from domestic events such as corporate earnings numbers, where margins were seen to have improved. This might well limit downside from any incrementally negative global cues if the Fed decides to hold rates as expected, they said.
“Domestically, there is something to cheer about, as margins are on the positive side because of the softening in commodity prices. Besides, the pick-up in monsoon has people believing that the RBI (Reserve Bank of India)’s concerns about inflation may come down a bit,” said Pankaj Pandey, head of research, ICICI Direct.
Typically, the F&O expiry week sees some nervousness and volatility in the market. Analysts said the nervousness had earlier been heightened by the expectation of the US Federal Reserve’s decision on interest rates, after its two-day Federal Open Market Committee (FOMC) meeting on Wednesday. Volatility in global markets, particularly in China, had also made the market nervous.
Markets rose after two volatile trading sessions, following cues from global markets on hope of a delay in the US interest rate hikes being decided by a the Fed meet currently underway in Washington. Benchmark indices rose about 0.4 per cent, ending two straight days of losses, ahead of the derivatives expiry.
The BSE Sensex gained 105 points, or 0.38 per cent, to close at 27,563, while the NSE Nifty rose 38 points, or 0.46 per cent, to end at 8,375. Benchmark indices have so far slipped about two per cent this week.
Experts believe that the recent Greek crisis and the volatility in the Chinese equity markets might have reduced the Fed’s resolve to raise interest rates. Further, the crash in the crude oil prices has further softened commodity prices, triggering more concerns for the Chinese growth.
India, however, many believe, could be in a sweet spot, as domestic corporate numbers turn out to be better than expected, the revival of the monsoon and hopes of further cuts in interest rates by the RBI. “The indices in India recorded only modest gains, but the advance/decline ratio improved suggesting that recent falls have invigorated investors’ risk taking appetite,” said Anand James, co-head technical research desk, Geojit BNP Paribas Financial Services.
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On Wednesday, capital goods stocks were up on falling commodity prices and expectations of a rate cut, rising about 1.9 per cent. Rate cut hopes also propped up stocks of the automobile sector, which gained 1.4 per cent. Information technology stocks shored up gains as well, with the IT index moving up 1.5 per cent.
On Wednesday, capital goods stocks were up on falling commodity prices and expectations of a rate cut, rising about 1.9 per cent. Rate cut hopes also propped up stocks of the automobile sector, which gained 1.4 per cent. Information technology stocks shored up gains as well, with the IT index moving up 1.5 per cent.
On the BSE, for every stock that declined, two stocks saw their share prices rising.
As per provisional data from the exchanges, foreign portfolio investors (FPIs) were net-sellers at Rs 186 crore, as against the domestic institutional investors (DIIs) who were net-buyers of equities at Rs 642 crore.