Sensex, Nifty end higher ahead of US Fed rate decision

Indian equity market ended in the green on September 18 ahead of a widely expected rate cut by the US Federal Reserve.

The US Fed will conclude its policy meeting later today in the light of conflicting economic data and constant pressure from the US government for interest rate cuts.

After a two day losing streak, benchmark indices Sensex and Nifty moved up, supported by gains in shares of select heavyweights, including Reliance Industries, State Bank of India and ITC.

Rupee’s rise against the US dollar and easing crude oil prices offered relief to market participants.

“The correction in crude oil prices has definitely provided respite to investors. Nonetheless, geo-political developments would still be one of the key factors on investors’ radar as any further escalation would have an adverse impact on markets and economy,” said Ajit Mishra Vice President, Research, Religare Broking.

Brent crude fell nearly 6 percent and erased some of the previous day gains after Saudi Arabia said that 50 percent of daily oil production has been restored after the September 14 drone attacks.

Rupee jumped 55 paise to end at 71.23 per dollar.

The Sensex closed 83 points, or 0.23 percent, higher at 36,563.88, with 18 stocks in the green.

Tata Steel, Vedanta, State Bank of India, Tech Mahindra and Bajaj Finance emerged as the top gainers in the Sensex kitty.

Meanwhile, ONGC, Yes Bank, Bharti Airtel, HDFC Bank and Sun Pharma settled as the top losers in the Sensex pack.

The Nifty50 closed with a mild gain of 23 points, or 0.21 percent, at 10,840.65, with 33 stocks in the green.

BSE Midcap and Smallcap indices outperformed Sensex, closing 0.39 percent and 0.30 percent higher, respectively.

Barring BSE Telecom (down 0.43 percent) and Auto (down 0.10 percent), all sectoral indices logged gains. BSE Realty, Metal and Oil & Gas closed 1.54 percent, 1.34 percent and 1.10 percent up, respectively.

Top news of the day:

The Union Cabinet approved a ban on e-cigarettes. The ban prohibits production, manufacturing, import, export, transport, sale or distribution, storage and advertisement of e-cigarettes in India.

The Supreme Court of India has fixed October 18 as the deadline to finish arguments in the Ayodhya land dispute case.

Iran has sent the United States a diplomatic note denying any role in attacks on Saudi oil installations and warning of a response to any action, state media said on September 18.

Stocks in news:

Shares of cigarette company ITC rebounded from its 52-week low to close 1 percent higher at Rs 239.60 while those of Godfrey Phillips gained 5.55 percent to Rs 990.95 on BSE on September 18 after Cabinet approved the ban on e-cigarettes.

Shares of Bajaj Finance rose 1.47 percent to Rs 3,415.05 after the company’s board approved the plan to raise Rs 8,500 crore.

Shares of Mindtree climbed 2.77 percent to Rs 699.35 after the company announced the release of blockchain-powered “Merchant On-Boarding” solution for banks.

After nine successive sessions of gains, shares of Sintex Plastics Technology fell 5 percent to get locked in lower price band at Rs 5.33 after the company informed its chief financial officer (CFO) had resigned two days earlier.

Shares of Sunteck Realty advanced 2.32 percent to Rs 450.40 after the company acquired a premium project in Mumbai.

Shares of CG Power and Industrial Solutions declined 4.65 percent to Rs 14.96 after SEBI barred the company’s former chairman Gautam Thapar from accessing securities market.

Shares of state-owned gas distribution company GAIL gained 2.27 percent to Rs 134.90 after CLSA retained bullish stance on better earnings performance in the second half of FY20.

Global update:

Oil prices steadied as Middle East events kept investors nervous, while caution ahead of an expected US interest rate cut kept wider financial markets in tight ranges. European stocks were subdued, with luxury stocks one of the few sectors seeing activity, Reuters reported.

Asian markets were tepid amid cautious mood as investors awaited a widely expected interest rate cut by the US Federal Reserve, while a slew of regional central bank meetings kept a lid on risk appetite.

Shanghai Composite Index closed 0.25 percent up at 2,985.66, while Kospi climbed 0.41 percnt to 2,070.73. Nikkei ended 0.18 percent down at 21,960.71.

Technical view:

Nifty formed a small body of a negative candle with minor lower shadow. This consolidation pattern has formed within a long negative candle of September 17 which indicates a rangebound movement and this raises hopes for another round of upside bounce from the lower levels.

“The index did not show any follow-through weakness after a sharp weakness of the previous session which could be a relief factor for the bulls to make a comeback from the lower levels. Some more consolidation or a minor weakness is likely in the next 1-2 sessions, before showing another round of upside bounce from the lows. Immediate support to be watchedis at 10,750 level,” said Nagaraj Shetti, Technical Research Analyst at HDFC securities.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.