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Markets ended on a cheerful note on Thursday as investors breathed a sigh of relief following hints from the US Fed Reserve that the proposed interest rate hike for September is now looking like a distant possibility. The firmness in global markets also uplifted the sentiment of the market participants.
The barometer S&P BSE Sensex ended at 26,231, up by 517 points or 2% while the CNX Nifty surged 159 points or 2% to 7,949.
The broader markets outperformed their larger peers, with the BSE Mid-cap and Smallcap indices up by 2.5% each. The market breadth remained strong, with 1899 gainers and 674 losers on the BSE.
Meanwhile, the concerns over a slowdown in the Chinese economy seem to have abated for now as Beijing tried to calm nerves by easing monetary policy post market hours on Tuesday.
RUPEE
The rupee strengthened against the dollar and is currently trading at Rs 65.98, up by 19 paise. The rally in the local equities also provided some support to the rupee.
AUGUST F&O EXPIRY
Indian stock futures also took a hit post the global mayhem on worries that economic slowdown in China would hurt global growth. Further, the devaluation of its yuan also impacted the Indian rupee which fell to its lowest level in the August F&O series. Further, foreign institutional investors which have been huge sellers in the cash and derivative segments also dampened sentiment during the August series. CLICK HERE FOR MORE
MARKET OUTLOOK
According to Mudit Goyal, Technical Analyst, SMC Global Securities, "After correcting more than 600 points in last few sessions, short term and medium term bias has turned negative for the markets for near term. As we have seen more than 7% correction in August series so bounce back and short covering was expected and witness the same in today’s session. Considering the chart, I must say, this bounce can be considered as dead cat bounce for near term. One should follow “Sell on rise strategy” for near term."
He further added, "On technical charts, 8140 is the major resistance mark which is the 50% retracement of recent downside from 8620 to 7667 levels. Till we trade below 8140, the bias remains negative for the markets. Every rise should be considered as selling opportunity for near term."
CRUDE OIL
Crude oil is moving towards stabilisation after China’s central bank tried to breathe life into its economy by cutting the interest rate. However, the prices are still near its six and a half year lows as the market is plagued by oversupply of crude oil.
GLOBAL MARKETS
Asian equities closed on a firm note as Beijing cut its interest rates on Tuesday to aid its ailing economy. China’s Shanghai Composite ended comfortably up by 5% while Japan’s Nikkei and Hong Kong’s Hang Seng ended up by 1% and 3.5% respectively.
The European markets also opened on a positive terrain following the possibility of a delay in the US fed rate hike. The European equities are trading between 2.3-3% each.
SECTORS & STOCKS
Sectorally, the BSE Consumer Durables index surged over 5% followed by BSE Healthcare and Oil&Gas indices, up by 2%. No sector is trading in the negative terrain.
HDFC zoomed 8.4% on value buying after falling nearly 19% in the past one month. IIFL Securities has also maintained its “buy” rating on the stock.
Vedanta has decided to shut down its plant in Odisha following the crash in aluminium prices and the unavailability in bauxite from Odisha. However, the stock saw some value-buying today and it soared 6.5% on the Sensex.
ICICI Bank has launched the country's first mortgage guarantee-backed home loan that will allow consumers to increase borrowing by 5-20 per cent and the tenure up to 67 years of age. The stock gained nearly 2%.
Mahindra Truck and Bus Division (MTBD), part of Mahindra Group, is investing Rs 700 crore in the business to expand its footprint in the light and intermediate commercial vehicle segment. M&M shares surged 1.3%
Shares of Bharti Airtel ended up by 2.2% after the telecom major said it has acquired Augere Wireless Broadband India which holds 20 MHz of BWA spectrum in the telecom circle of Madhya Pradesh and Chhattisgarh.
L&T’s power transmission and distribution business has bagged orders worth Rs 864 crore from Qatar General Electricity and Water Corporation ‘KAHRAMAA’. The stock gained 1.7%.
Lupin extended its gains after the pharma major received approval from the US Food & Drug Administration for anti-inflammatory drug Diclofenac Sodium. The stock surged 4.7%
Oil has rebounded slightly taking positive cues from Asian markets. The strength in the rupee has helped the oil marketing companies. The pack gained 2-7% each on the Sensex. Index heavyweight Reliance Inds advanced nearly 2%.
Banking and financial shares were in demand. Bank of Baroda (6%), Kotak Mahindra Bank (3.7%), Axis Bank (2.7%), SBI (1.7%) HDFC bank (1.2%) all edged higher.
Among other stocks, Aurobindo Pharma got an approval from the US FDA to manufacture generic Entecavir tablets that are used in treatment for Hepatitis B in the US markets. The stock gained nearly 3%
The textile ministry is looking to grab the lowest slab of the proposed GST bill. Following the news, the stocks of textile industry ended on a cheerful note. JBF Industries and Himatsingka Seide ended up by 10% each.
