Nifty hovers around 8,050; rupee dips below 66/$

Benchmark indices continued their upward march led by a strong rally in financial and banking shares on the hopes of a monetary easing by the Reserve Bank of India (RBI) after the US Federal Reserve did not opt for a short term interest rate hike. 

The US Fed decided to hold on to the interest rate hike on concerns of a global economic slowdown but did not rule out a possibility of mild tightening in the monetary policy later this year. The Indian markets, however, shrugged off the negative news and cheered the outcome of the FOMC meet, which otherwise would have seen an outflow of capital from the markets. 

At 13:00 pm, the Sensex was higher by 433 points at 26,396 and the Nifty gained 132 points at 8,032.

Among broader markets, BSE Midcap and Smallcap indices are up between 1.4-1.9%. Market breadth is positive with 1,662 advances and 514 declines.

MARKET OUTLOOK

On the Fed's decision to keep the rates unchanged, Dhananjay Sinha, Head of Research, Economist & Strategist, Emkay Global Financial Services Limited said, "Implications for India is that the unchanged Fed rate provides scope for RBI to reduce rates which we expect to be lowered by 25bps on Sep 29,2015. The downdraft for INR would also be rested temporarily. Hence, we expect the markets to react positively especially in respect to rate sensitive’s." 

He further added, "The Fed has taken a positive view on the robustness of US economic data which includes strengthening of labour market and consumer confidence. On the downside, concerns still remain on weak exports and lack of strength in investments."

RUPEE

The Indian currency welcomed the news of an unchanged interest rates by the US Fed. The currency is currently at 65.92, appreciating by 52 paise, against the greenback after the American currency tumbled against major world currencies as the Federal Reserve decided again not to increase interest rates.

CRUDE OIL

Oil prices, however, slipped on fresh signs that  the Middle East will continue to prioritise market share over prices, inspite that the United States kept interest rates at historic lows. 

SECTORS & STOCKS

Sectorally, the BSE Bankex is leading the rally with over 3% gains followed by counters like Realty, Auto, Capital Goods, all up between 1.5-3.5%. Bank Nifty has jumped 600 points, up by 3.5%

Financial and Banking stocks are applauding the decision of the Fed to keep the rates unchanged as it gives more room for the RBI to ease its monetary policy. Axis Bank, ICICI Bank , SBI, HDFC twins have all jumped between 2-5% each on the Sensex. 

According to reports, Lupin received another nod from the US FDA for a drug that can treat bacterial infections. The stock has surged 3%

Shares of Infosys are up 1% after the IT major in a release announced that Qantas Credit Union has selected Infosys Finacle to improve its customers's digital experience, as part of their business transformation strategy.

GAIL is down 1.4%. State gas utility GAIL India has re-invited bids to hire nine newly-built LNG ships on modified terms that allow Indian shipyards to pick up to 13 per cent stake in three of these carriers that shipbuilders have to make in the country

Tata Steel will sell shares in automaker Tata Motors worth up to $188 million, according to a term sheet of the deal seen by Reuters on Friday. Tata Steel has gained 1% while Tata Motors has slumped by over 2%

Maruti Suzuki is planning to start an investor roadshow in a bid to explain why it let Suzuki oun the upcoming plant in Gujarat according to reports. The stock gained over 2%

SMART MOVERS

Shares of 8K Miles Software was up over 1% at Rs 1,409 on the Bombay Stock Exchange after the company announced the acquisistion of US-based NexAge Technologies USA Inc.

Shares of Granules India were up nearly 5% on the Bombay Stock Exchange after the company announced that it has received approval from the USFDA for Ibuprofen tablets.

Shares of SKS Microfinance were down over 12% at Rs 394 on the Bombay Stock Exchange after the micro-finance major remained unsuccessful in obtaining small bank license.