Equity benchmark indices rose for the third straight day on Wednesday, recovering early losses to conclude in positive territory, boosted by buying in metal, commodity, and energy companies after upbeat WPI inflation data.
However, cautious trading persisted in the market as investors decided to remain on the sidelines ahead of the US Fed’s interest rate decision later in the day.
The 30-share BSE Sensex rose 85.35 points, or 0.14 percent, to 63,228.51. It reached a peak of 63,274.03 and a low of 63,013.51 during the day.
The NSE Nifty rose 39.75 points, or 0.21 percent, to 18,755.90.
“With improving macros and FII buying, the overall market structure remains positive.” Investors will look to the outcome of the US Fed meeting on policy rates, as well as the Fed Chair’s commentary. The ECB and the Bank of Japan would both make policy decisions on Thursday.
” Sectorally, it was a mixed bag, with metals and oil and gas leading the way. “After China’s central bank cut interest rates and unveiled stimulus measures, metals stocks remained in the spotlight,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Tata Steel led the Sensex gainers with a 2.39 percent increase, followed by Tata Motors, Power Grid, Reliance Industries, UltraTech Cement, NTPC, Nestle, HUL, Mahindra & Mahindra, Wipro, Kotak Mahindra Bank, and Asian Paints.
Bajaj Finance, IndusInd Bank, Axis Bank, Bharti Airtel, Bajaj Finserv, ICICI Bank, Infosys, and Titan, on the other hand, were among the laggards.
The BSE smallcap index increased 0.42 percent, while the midcap index increased 0.20 percent.
Metal rose 1.60 percent, commodities rose 1.03 percent, oil and gas rose 0.88 percent, energy rose 0.86 percent, utilities rose 0.63 percent, and power rose 0.63 percent.
Financial services, banks, capital goods, information technology, and telecommunications were the laggards.
“Due to underperformance in the banking index, the recent recovery in the Nifty index lacks decisiveness, and we expect this divergence to end soon.” Meanwhile, purchasing in heavyweights like as Reliance has been crucial in maintaining a constructive tone,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.
The wholesale price-based inflation rate fell to a three-year low of (-) 3.48 percent in May, owing to lower food, gasoline, and manufactured-goods prices, bolstering the case for prolonging the halt in rate hikes in the remaining months of the current fiscal year.
This is the second month in a row that WPI has fallen, owing to a higher base and declining fuel and manufactured goods prices. Food costs also fell in May.
In Asian markets, Seoul, Shanghai, and Hong Kong finished lower, while Tokyo finished higher.
European equity markets were trading higher. On Tuesday, the US markets finished in the black.
“The domestic indices recovered after an initial period of profit-taking, supported by encouraging WPI inflation data and positive global cues, while selling in IT and banking stocks limited gains.” The positive decrease in US inflation, driven by reduced energy prices, and speculation of a possible pause in the Fed rate hike campaign provided relief to global shares.
“However, the persistence of higher core inflation levels may compel the Fed to maintain its hawkish tone during today’s policy announcement with an indication of a prolonged pause,” according to Vinod Nair, Head of Research at Geojit Financial Services.
Brent crude rose 1.08 percent to USD 75.09 a barrel, the global oil benchmark.
According to exchange data, Foreign Institutional Investors (FIIs) purchased securities worth Rs 1,677.60 crore on Tuesday.
The BSE benchmark rose 418.45 points, or 0.67 percent, to end at 63,143.16 on Tuesday, its second consecutive session of gains. The Nifty finished the day up 114.65 points, or 0.62 percent, at 18,716.15.
