Markets end higher ahead of Fed outcome, China stimulus

Benchmark share indices ended higher on Wednesday, snapping two-day losses, after China announced fresh monetary stimulus and hopes that US Fed, which ends its two-day policy meet later today, may continue with its low interest rate regime for a considerable time.  

 

The 30-share Sensex gained 139 points to end at 26,631 and the 50-share Nifty climbed 43 points to close at 7,975.

 

Among the broader markets, BSE Midcap and Smallcap indices underperformed the large counter parts and ended up 0.3% each.

 

The market breadth ended slightly positive on the BSE with 1,532 shares advancing and 1,485 shares declining.

 

Meanwhile, provisional data released by the stock exchanges after trading hours on Tuesday, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 828.95 crore on that day.

 

Rupee:

 

The rupee is trading at 60.9 compared to Tuesday's close of 61.0550/0650. Trading is largely range-bound ahead of Fed meeting.

 

Global Markets:

 

Asian shares were tentatively higher on Wednesday after Wall Street rebounded on speculation the Federal Reserve would maintain a pledge on low rates when a two-day policy meeting ends later in the session.

 

The Dow hit a fresh record while the U.S. dollar took a knock after the Wall Street Journal's Fed watcher Jon Hilsenrath said the central bank would keep the words “considerable time” in its policy statement, though it might qualify them.

 

The CSI300 of the leading Shanghai and Shenzhen A-share listings rose 0.5%, regaining a little of Tuesday's sharp decline. Tokyo's Nikkei ended marginally lower while Straits Times index, Shanghai Composite and Hang Seng gained 0.7%, 0.5% and 1% each.

 

China's economic stimulus raised hopes of a boost in demand in the biggest consumer. Further, the People's Bank of China is injected a combined 500 billion yuan ($81.35 billion) of liquidity into the country's top banks in moves to support a slowing economy, 

 

Meanwhile, European stocks are also trading higher, boosted by speculation the Fed will maintain a pledge on low rates in a meeting that will conclude later in the day. Report on China central bank stimulus also adds to positive sentiment

 

Sectors & Stocks:

 

On the sectoral front, BSE It index was the top gainer up over 1% followed by Teck, Power, Capital Goods and Auto indices. However, BSE Consumer Durables index lost over 1%. BSE Healthcare, Metal, FMCG and Oil & Gas indices ended 0.2% higher.

 

Shares of IT majors gained between 1-2.5% on the BSE on the back of fresh orders and hopes that Fed will stick to its pledge of keeping rates low. Sentiments of the market participants further boosted after China injected $81 billion into major banks.

 

Shares of Wipro extended its yesterday’s rally and surged nearly 2% in today's trade after Wipro Arabia, a subsidiary of India's third largest IT firm Wipro, secured a contract from Saudi-based Saudi Electricity Company (SEC) for implementing and rolling out plant maintenance and project system functionality of SAP ERP application.

 

Infosys climbed nearly 2.5% after the company enabled Muji, a leading retailer in Japan to deliver a superior shopping experience through real-time insights into buying behavior of its customers.

 

Shares of Hero Motocorp gained over 1.5% after the company announced it would set up an ultra-modern manufacturing facility with a capacity to produce 1.8 million units annually in Andhra Pradesh. M&M, Maruti Suzuki and Bajaj Auto climbed between 0.5-1%.

 

Shares of Tata group witnessed an upsurge and gained between 1-2.5% on the Bombay Stock Exchange (BSE).

 

Tata Power rebounded in today’s trade and gained over 2% on value buying after showing a sharp declination in the recent past on a massive power failure in Mumbai on September 2 due to technical snags at Tata Power’s 500-Mw Trombay plant. 

 

Tata Steel which plunged nearly 2% on weak Chinese economic data gained nearly 2% in today's trade.

 

Tata Consultancy Services (TCS) appreciated over 1% on upbeat US economic data that indicated growth in the world's largest economy is gaining momentum.

 

Index heavyweight Tata Motors ended 1.6% higher.

 

Dr Reddy’s Lab, NTPC, RIL and BHEL were some of the notable names in green up between 0.5-3%.

 

On the flip side, select metal shares witnessed selling. Sesa Sterlite and Coal India lost between 0.2-1.5% shrugging off the news that China's economic stimulus has raised hopes of a boost in demand in the world's biggest consumer of metals.

 

In the healthcare space, Cipla and Sun Pharma which surged in the recent past lost between 0.5-2% on profit taking.

 

ONGC, HUL and HDFC Bank were some of the prominent names in red and ended down between 0.4-1%.

 

Among other shares, Hatsun Agro Products gained 3.5% to Rs 302 after the company said its board will meet on September 23, to consider issue of shares on a preferential basis. 

 

Shares of Zee Entertainment Enterprises Ltd (ZEEL) ended up 2% at Rs 290 after Kotak Institutional Equities upgraded the stock to "add" from "reduce" earlier.

 

Ramky Infrastructure zoomed 7% to Rs 58 after a media report suggested that the Ajay Piramal group has emerged as the front runner to purchase its three highway projects.