Sensex, Nifty climb nearly 1%; IT, banking stocks shine

Benchmark indices bounced back on July 27 after a two-day decline, with the Sensex and Nifty climbing nearly 1% each, tracking heavy buying in IT and banking stocks amid a positive trend in European markets.

At the closing bell, the 30-share BSE benchmark jumped 547.83 points or 0.99% to settle at 55,816.32. During the day, it climbed 584.6 points or 1% to 55,853.09.

The broader NSE Nifty advanced 157.95 points or 0.96% to 16,641.80.

Sun Pharma was the top gainer in the Sensex pack, spurting 3.39%, followed by State Bank of India, Larsen & Toubro, Asian Paints, TCS, UltraTech Cement, Bajaj Finance and IndusInd Bank.

Bharti Airtel, Kotak Mahindra Bank, NTPC, Bajaj Finserv and Reliance Industries were the laggards, shedding up to 1.32%.

“Indian market will react to global trends in-line with FOMC (Federal Open Market Committee) meeting outcome. We are in a rally during the last one and half months assuming that much is factored in the price.

“The market has not factored in a recession as valuation continues to trade marginally above the long-term trend. Value buying should be the essence of investment till the risk of a recession subsides,” said Vinod Nair, Head of Research at Geojit Financial Services.

Shares of Maruti Suzuki India (MSI) on Wednesday gained 1.62% after it reported over two-fold jump in its consolidated net profit to Rs 1,036 crore for the first quarter ended June 30, mainly due to a low base in the year-ago period.

“Domestic markets regained their positive momentum after taking a two-day pause. Strong results by Index heavyweights like Asian Paints, L&T, Maruti, and Tata Steel boosted investors’ confidence.

“All eyes would be on US Federal Reserve which is likely to announce another 75bps rate hike to control record-high inflation. Further, Fed’s commentary on its future rate action would give direction to the market,” Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd, said.

In the broader market, the BSE midcap gauge jumped 0.90% and smallcap index climbed 0.38%.

Among the BSE sectoral indices, healthcare jumped 1.73%, IT (1.34%), basic materials (1.17%), industrials (1.12%), and teck (1.12%). Telecom was the only laggard.

Meanwhile, the rupee declined 13 paise to close at 79.91 (provisional) against the US dollar on Wednesday.

In Asia, markets in Seoul and Tokyo ended higher, while Shanghai and Hong Kong settled in the red.

Markets in Europe were trading mostly higher during mid-session deals. The U.S. markets had ended lower on Tuesday.

“Nifty broke a two-day losing streak on July 27 ahead of the U.S. Fed meet outcome in the evening. In the process, Nifty was one of the best performers in the Asian region,” said Deepak Jasani, Head of Retail Research, HDFC Securities.

Meanwhile, international oil benchmark Brent crude climbed 0.53% to $105 per barrel.

“Markets regained the ground as bulls found their way out of the woods ahead of the US FOMC policy decision later. However, a volatile session is expected on Thursday as the street will react to the Fed outcome and July F&O expiry turmoil.

“Also, commanding attention will also be US Q2 GDP to be released on July 28. The July F&O series expiry on Thursday shall also keep markets volatile,” Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities Ltd, said.

Investors seemed to have priced in a 75 bps rate hike by the US Fed, while recovery in other Asian indices contributed to the overall uptick in markets. However, markets may see bouts of volatility ahead of the monthly F&O expiry tomorrow, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, noted.

“Ahead of a critical FOMC meeting, markets have been buoyant in hopes that the process of monetary tightening is drawing to a close. Cooling of raw material prices has helped Autos and FMCG names, while 1Q results have been quite encouraging thus far,” according to S. Hariharan, Head- Sales Trading, Emkay Global Financial Services.

Foreign institutional investors remained net sellers as they offloaded shares worth Rs 436.81 crore on Wednesday, as per exchange data.