Stock markets build on gains ahead of Fed decision; Nifty reclaims 11,600

Equities rose on Wednesday for the second straight session with the benchmark Nifty gaining 82.75 points or 0.72% to close at 11,604.55. Similarly, the 30-share Sensex rose by 258.5 points or 0.66% to close at 39,302.85. Positive global cues ahead of the US Federal Reserve’s Federal Open Market Committee statement drove the markets higher.

The markets remained range-bound throughout the day but clocked most of its gains during the last hour of trade. They started the session with minor gains, tracking cues from Asian markets, which continued to rally for the second straight session. Bourses in Japan, Singapore and Taiwan were up between 0.09% and 1.02%. European markets, at the time of press, were trading flat, with France’s Cac 40 and Germany’s Dax trading higher by 0.11%. Conversely, the UK’s FTSE 100 was down by 0.19%.

The markets were tracking gains from Wall Street’s overnight rally. The Dow Jones Mini futures were up 132 points ahead of the market opening.

Siddhartha Khemka, head- retail research, Motilal Oswal Financial Services, said, “The global cues were mixed ahead of the US Fed policy outcome. On the domestic front, investors returned to large-caps after the mid- and small-caps lost their steam. Markets also took positive cues from RBI Governor Shaktikanta Das’s statement in the FICCI National Executive Committee meeting, where he assured that the RBI is closely monitoring the economic situation, and is ready to take further measures to prepare the economy and banking system to fight the Covid-19 pandemic.”

Lack of domestic triggers capped the markets’ gains. Meanwhile, foreign brokerage Jefferies, in its report, stated that economic activity in the country had crossed the 90% levels, inching closer to the pre-Covid-19 times for the first time. Jefferies said, “Jefferies economic recovery tracker (JRT) improved 1% week on week to cross into 90%-plus of pre-Covid-19 for the first time. Even as Covid-19 cases rise, the government allowing more movement is helping. The long dormant hotel and travel web traffic is seeing a pickup. Our preferred recovery plays are Maruti, DLF, Godrej Properties, Crompton, Kajaria, HDFC and HDFC Bank.” It also stated that broad-based indicators such as toll collections, rail and road freight were now consistently higher year on year.

The cash market segment on NSE saw a turnover worth Rs 51,031.26 crore against the six-month-average of Rs 53,128 crore. The futures and options segment saw a turnover of Rs 18.9 lakh crore against the six- month-average of Rs 15.43 lakh crore. The foreign portfolio investors (FPIs) have yet again turned buyers of the Indian equities, pumping $513.66 million in total. On Tuesday, FPIs bought stocks worth $154.06 million, whereas, domestic institutional investors sold stocks worth $117.84 million.

The biggest gainers on Nifty were Dr Reddy’s Laboratories, Mahindra and Mahindra, Hindalco, Bajaj Auto, as well as Britannia Industries — up by 4.44%, 4.01%, 3.9%, 3.52%, and 3.05%, respectively. The biggest losers were IndusInd Bank, NTPC, Bharti Infratel, State Bank of India, and Axis Bank — down by 2%, 1.65%, 1.14%, 1.07%, and 1.02%, respectively.