 "Nifty ends above 7,700 led by oil stocks; US FOMC meet eyed")
Markets reversed early losses in the second half of the trading session to end higher on Tuesday after firm global crude oil prices led to a rally in oil stocks while FMCG shares gained despite rise in consumer price inflation.
The S&P BSE Sensex surged 170.09 points to close at 25,320.44 and the Nifty50 surged 50.85 points to end at 7,700.90. In the broader markets, BSE Midcap and Smallcap indices were up 0.5%-1%.
Commenting on the current market situation, Amar Ambani, Head of Research, IIFL, said, “Nifty50 extended its recovery for the second day in a row. The rally would further extend if Nifty50 manages to convincingly breach past the 7,705 mark on a closing basis. 7,800 would act as the first hurdle on the upside beyond which we see Nifty racing towards the December high of 7,980 mark.”
At 3:35 pm, the rupee was quoting at 67.01 against dollar on demand from banks and exporters amid heightened uncertainties of US rate hike.
Besides, stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in US interest rates later in the week. Oil prices resumed their fall and the euro rose against the dollar.
European shares opened higher after hitting 2-1/2-month lows on Monday when oil prices fell to their weakest since 2008. FTSE rose over 1%.
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1%. Japan's Nikkei stock index ended down 1.7% at a 7-1/2-week low and Chinese stocks lost 0.3%-0.5%.
Back home, oil shares firmed up following slight rebound in global crude oil prices. Reliance Industries rose over 2% while ONGC gained nearly 2%.
FMCG stocks gained despite rise in November consumer price inflation. ITC and Hindustan Unilever were up 1%-2.4% each.
"We have seen a defensive buying in the market just before the US Federal Reserve meet which starts later today. We feel that the market has already factored the consensus rate hike expectation of 25 bps. On the domestic front, November CPI inflation has moved up to 5.4%, which is just below the 5.8% targeted by RBI for January, 2016. This may limit the room for further rate cut by RBI in the near-term," adds Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
Auto shares recouped early losses after witnessing selling pressure in early trades on concerns that the proposed ban on diesel vehicles by the NGT in Delhi could spill on to other states. Tata Motors, Hero Moto, Bajaj Auto and Maruti Suzuki ended higher between 1%-2%.
Most bank shares rebounded from lower levels and ended positive barring ICICI Bank. HDFC, HDFC Bank and ICICI Bank were up 0.1%-1%. Earlier, bank shares were under pressure on concerns of rising bond yields on expectations that the US Federal Reserve at its two-day meet which begins later today may signal hike in interest rates.
Sun Pharma rose about 1% after the company announced the divestment of its Bryan, Ohio, US manufacturing unit following an agreement Nostrum Laboratories Inc.
Among other shares, Tara Jewels was locked in upper circuit of 10% at Rs 55.55, extending its past three days rally on the BSE, on back of heavy volumes.
Force Motors rallied over 14% to Rs 3,138 on the BSE on back of heavy volumes.
Hotel Leelaventure gained almost 3% after the company announced that it has completed the Rs 725-crore sale of its Goa property to Ceres Hotels.
With Reuters inputs
The S&P BSE Sensex surged 170.09 points to close at 25,320.44 and the Nifty50 surged 50.85 points to end at 7,700.90. In the broader markets, BSE Midcap and Smallcap indices were up 0.5%-1%.
Commenting on the current market situation, Amar Ambani, Head of Research, IIFL, said, “Nifty50 extended its recovery for the second day in a row. The rally would further extend if Nifty50 manages to convincingly breach past the 7,705 mark on a closing basis. 7,800 would act as the first hurdle on the upside beyond which we see Nifty racing towards the December high of 7,980 mark.”
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Meanwhile, market participants will keenly watch the proceedings of the two-day US Federal Reserve meet which begins later today. The US central bank is widely expected to raise interest rates for the first time in almost a decade.
At 3:35 pm, the rupee was quoting at 67.01 against dollar on demand from banks and exporters amid heightened uncertainties of US rate hike.
Besides, stocks rose in Europe and Asia on Tuesday, though volatile oil prices kept investors cautious before a widely anticipated increase in US interest rates later in the week. Oil prices resumed their fall and the euro rose against the dollar.
European shares opened higher after hitting 2-1/2-month lows on Monday when oil prices fell to their weakest since 2008. FTSE rose over 1%.
MSCI's broadest index of Asia-Pacific shares outside Japan was up about 0.1%. Japan's Nikkei stock index ended down 1.7% at a 7-1/2-week low and Chinese stocks lost 0.3%-0.5%.
Back home, oil shares firmed up following slight rebound in global crude oil prices. Reliance Industries rose over 2% while ONGC gained nearly 2%.
FMCG stocks gained despite rise in November consumer price inflation. ITC and Hindustan Unilever were up 1%-2.4% each.
"We have seen a defensive buying in the market just before the US Federal Reserve meet which starts later today. We feel that the market has already factored the consensus rate hike expectation of 25 bps. On the domestic front, November CPI inflation has moved up to 5.4%, which is just below the 5.8% targeted by RBI for January, 2016. This may limit the room for further rate cut by RBI in the near-term," adds Vinod Nair, Head-Fundamental Research, Geojit BNP Paribas Financial Services.
Auto shares recouped early losses after witnessing selling pressure in early trades on concerns that the proposed ban on diesel vehicles by the NGT in Delhi could spill on to other states. Tata Motors, Hero Moto, Bajaj Auto and Maruti Suzuki ended higher between 1%-2%.
Most bank shares rebounded from lower levels and ended positive barring ICICI Bank. HDFC, HDFC Bank and ICICI Bank were up 0.1%-1%. Earlier, bank shares were under pressure on concerns of rising bond yields on expectations that the US Federal Reserve at its two-day meet which begins later today may signal hike in interest rates.
Sun Pharma rose about 1% after the company announced the divestment of its Bryan, Ohio, US manufacturing unit following an agreement Nostrum Laboratories Inc.
Among other shares, Tara Jewels was locked in upper circuit of 10% at Rs 55.55, extending its past three days rally on the BSE, on back of heavy volumes.
Force Motors rallied over 14% to Rs 3,138 on the BSE on back of heavy volumes.
Hotel Leelaventure gained almost 3% after the company announced that it has completed the Rs 725-crore sale of its Goa property to Ceres Hotels.
With Reuters inputs