Nifty has to stay above 7,880 for the market to head higher
We had mentioned in Tuesday’s closing report that Nifty, Sensex have hardly responded to a 50 bps cut in interest rates and that for an uptrend, Nifty has to close above 8,000. With global cues from Asian markets being favourable, and Tuesday’s RBI (Reserve Bank of India) rate cut in the hand, there was a rally in the main stock indices, leading to the major indices closing with gains of more than 1%. However, Bank Nifty struggled to rally.
Analysts cited that more than expected monetary easing coupled with a dovish outlook by the country's central bank, strengthening rupee value and stable Asian bourses supported the Indian markets. Furthermore, the Supreme Court's verdict in favour of Mauritius-based foreign fund Castleton Investment has offered more clarity over the applicability of minimum alternate tax (MAT) on foreign portfolio investors (FPIs). The verdict is expected to restore FPIs' confidence in the Indian markets and smoothen the nerves of anxious investors. The government has already accepted the Justice A.P. Shah Committee's report on MAT that says the levy should not be applicable on FPIs.
The rupee gained by 21 paise and was trading at 65.75 against the US dollar from its previous close of 65.96 against the greenback. All the major Asian currencies appreciated by close to 1% against the US dollar.
Sector-wise, healthcare, automobile, metals, capital goods and information technology (IT) witnessed healthy buying support. On the other hand, only banking index came under heavy selling pressure. The S&P BSE banking index fell by 61.73 points.
The S&P BSE healthcare index zoomed by 274.41 points, automobile index rose by 212.53 points, metal index gained by 199.23 points, capital goods index increased by 189.04 points and IT index was higher by 187.44 points.
Major Sensex gainers during Wednesday's trade were: Tata Steel, up 5.24% at Rs.211.90; Bharti Airtel, up 4.50% at Rs.338; BHEL, up 4.18% at Rs.205.55; Gail India, up 3.90% at Rs.302.10; and Coal India, up 3.78% at Rs.326.50.
The major Sensex losers were: State Bank of India (SBI), down 1.96% at Rs.237.25; Axis Bank, down 1.68% at Rs.495.55; Vedanta, down 1.33% at Rs.85.10; Tata Consultancy Services (TCS), down 0.10% at Rs.2,587.70; and Maruti Suzuki, down 0.08% at Rs.4,671.05.
The top gainers and top losers of major indices in the Indian stock market are given in the table below:
The closing values of some of the Asian indices are given in the table below:
European indices are trading sharply higher - by 2%-2.70%.