Sensex back above 39,000! FOMC meet outcome awaited

The Indian stock market bounced back after Black Monday to snap 4-day losing streak despite muted trend seen in other Asian markets. The S&P BSE Sensex reclaimed 39,000 while Nifty50 closed a shade below 11,700 levels.

The final tally on D-Street – the S&P BSE Sensex rose 85 points to 39,046 while the Nifty50 closed 19 points higher at 11,691.

Nifty50 closed higher but remained volatile throughout the session. It witnessed selling pressure at levels above 11,700.

Investors tread with caution ahead of the outcome of the crucial US Fed meeting on June 19 and rise in trade war fears capped the upside for markets.

Even though benchmark indices closed in green but more than 400 stocks hit fresh 52-week low on the BSE which include names like Bosch, Jet Airways, HEG, Tata Sponge, TTK Healthcare, Escorts, Bharat Forge etc. among others.

In terms of sectors, the S&P BSE Oil & Gas index rose 1.1 percent, followed by the S&P BSE IT index which gained 0.76 percent, and the S&P BSE Power index was up 0.58 percent.

On the losing front, S&P BSE Healthcare index dropped 0.5 percent, followed by the S&P BSE Auto index which was down 0.52 percent, and the S&P BSE FMCG index that ended 0.32 percent below.

“Market ended positive supported by the ease in oil prices due to concern over global growth, trade-war and uncertainties in the upcoming OPEC meeting. There was a hope that the weakening domestic market will be supported by fiscal & monetary measures,” Vinod Nair, Head of Research, Geojit Financial Services Ltd told Moneycontrol.

“This hope is being tested given continuous weak economic & monsoon data. The market will be careful during the ongoing FED meeting which is expected to provide a dovish outlook,” he said.

The broader market space underperformed benchmark indices, the S&P BSE Midcap index rose 0.08 percent while the S&P BSE Smallcap index was down 0.42 percent.

Stocks in news:

Jet Airways shares extended losses and crashed up to 53 percent to hit a record low of Rs 32.25 after a media report indicated that State Bank of India filed insolvency petition against the company to recover dues. The stock lost 73 percent of its value in the last seven days.

HDFC Asset Management Company shares fell 6.3 percent after the company decided to take exposure to non-convertible debentures of debt-laden Essel Group.

Dabur India shares ended 3 percent lower after global brokerage Goldman Sachs downgraded the stock to sell with a target price of Rs 334, implying 16.66 percent potential downside from current levels citing competition in key segments as the main reason to sell.

Shares of Mcleod Russel touched 52-week low of Rs 19.85, locked at 5 percent lower circuit after rating downgrade by ICRA. Rating agency ICRA has downgraded the credit rating for the long-term borrowing program of the company and also the short term rating.

ICICI Bank shares ended 2 percent higher on June 18 after global brokerage firm Macquarie raised price target on the stock by 13 percent to Rs 525 from Rs 465 while maintaining outperform call.

Global Update

European stocks rebounded on June 18 following a speech from European Central Bank President Mario Draghi, which suggested that the ECB will provide more stimulus. The pan-European Stoxx 600 recovered from an early drop to climb 0.4 percent.

Markets in Asia ended mostly higher on June 18 as investors awaited the start of a closely-watched meeting by the US Federal Reserve, set to kick off later stateside.

The Shanghai composite was up slightly at 2,890.16 and the Shenzhen component gained 0.27 percent to 8,804.32, while the Shenzhen composite was higher by 0.163 percent to 1,504.57.

In Hong Kong, the Hang Seng index added more than 1 percent. Kospi gained 0.38 percent to close at 2,098.71. The Nikkei slipped 0.72 percent to close at 20,972.71.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.