Headline indices the Sensex and the Nifty ended in the green on July 27, tracking positive global cues, as better-than-expected quarterly earnings of some of the US and European firms boosted sentiment even as concerns regarding rate hikes and slowing economies persisted.
Investors awaited the US Fed decision on rates which is scheduled for later today but apart from the quantum of rate hikes, commentary on growth and inflation will be the key factor to watch out for.
After two sessions of losses, Sensex closed with a gain of 548 points, or 0.99%, at 55,816.32 while the Nifty closed at 16,641.80, up 158 points, or 0.96%.
In the 30-share pack Sensex, 25 stocks ended in the green, with shares of Sun Pharma, SBI, L&T, TCS and Asian Paints as the top gainers. Shares of Bharti Airtel, Kotak Mahindra Bank, NTPC, Bajaj Finserv and Reliance Industries ended in the red in the Sensex index.
BSE Midcap and Smallcap indices closed 0.90% and 0.38% higher, respectively. Among the sectoral indices, barring BSE Telecom (down 0.77%), all sectoral indices ended in the green, with healthcare, IT, banking, capital goods and metal indices rising over a percent each.
Crude oil prices steadied while the rupee extended weakness ahead of the US FOMC outcome.
Brent Crude traded near the $105 a barrel mark while the rupee closed 13 paise lower at 79.90.
"Indian market will react to the global trend in-line with FOMC 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.
More than 100 stocks, including ITC, PVR, Shoppers Stop, Inox Leisure, Gujarat Fluorochemicals and Adani Enterprises, hit their fresh 52-week highs in intraday trade on BSE.
S Hariharan, Head- Sales Trading, Emkay Global Financial Services is of the view that 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 Q1 results have been quite encouraging thus far.
He added that the current market environment is primarily driven by macro newsflow on the one hand and low positioning by domestic retail on the other hand. As a result, positive surprises have been producing outsized positive moves (as seen in reaction to a drop in crude oil prices or good results), whereas adverse newsflow is being largely ignored (as in the case of earnings disappointments for firms facing the domestic market).
On the technical front, Nifty recovered smartly today. On the lower end, it found support around 16,400 whereas, on the higher end, it moved above 16,600.
The trend looks positive at the current juncture; on the higher end, the recovery may continue towards 16,750-16,800. Support on the lower end is placed at 16,400-16,350, said Rupak De, Senior Technical Analyst at LKP Securities.
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