Sep 18, 2013, 07.46 PM | Source:

Sensex closes 158 pts up ahead of Fed meet outcome

Experts believe the FOMC is a much bigger event than RBI primarily because most of the volumes that are happening in the market are largely driven by FIIs. FIIs have bought more than Rs 7,000 crore worth of shares in September till yesterday.

Moneycontrol Bureau

The late trade rally pushed the equity benchmarks -- Sensex and Nifty -- above psychological 20000 and 5900 levels intraday Wednesday ahead of Fed meeting outcome later tonight. The rally was largely by banks, FMCG and oil & gas.

The Sensex rose 158.13 points to close at 19962.16 after hitting a day high of 20013.33 while the Nifty gained 49.25 points to 5899.45.

Experts believe that FOMC meeting is a much bigger event than RBI  monetary policy review primarily because most of the volumes that are happening in the market are largely driven by FIIs. FIIs have bought more than Rs 7,000 crore worth of shares in September till yesterday.

Fed tapering expectations have risen since the day FOMC hinted, in its last meeting, about reducing bond purchases irrespective of economic data. If there is no Fed tapering then the market may see major sell-off tomorrow, feel experts.

Amit Trivedi, Co-Founder, expects the market to rally if Fed tapering is less than USD 10 billion. He sees the Nifty touching 6,000-6,100. However, if the Fed disappoints then one should brace for a sell-off .

A CNBC poll shows the market watchers are expecting Bernanke to taper the monthly bond buying programme by nearly USD 15 billion.

Must Read - By expiry, Nifty may be either at 5500 or 6100: Udayan

Stock specifically, banks, FMCG, power, oil & gas, healthcare and metals stocks led support to the market in late trade.

Index heavyweights Reliance Industries and ITC advanced 1.4 percent each while Hindustan Unilever, HDFC Bank, State Bank of India and ICICI Bank rallied 1-2 percent.

Power stocks charged up in last couple of hours of trade today with the NTPC and Tata Power rising more than 3 percent.

Among pharma stocks, Sun Pharma and Cipla gained 1-1.5 percent while Dr Reddys Labs rallied 2.6 percent after UBS raised its target price on the stock to Rs 2,750 from Rs 2,600 on account of USFDA approval for Vidaza (which is used for cancer treatment).

DLF gained more than 4 percent. Bank of America Merrill Lynch has a buy rating on the stock with a target price of 230. The brokerage house says the stock is trading at attractive valuations and could surprise positively once macro improves.

However, BHEL and Hero Motocorp were major losers in the Sensex, falling nearly 5 percent and 3 percent, respectively.

Among midcaps and smallcaps, Polaris rose nearly 2 percent on a media report that the company is in talks to sell services business to Japan’s NEC Corp. The deal with NEC could possibly value the services division at USD 400-450 million, the report says.
PC Jeweller surged 4.4 percent after the government hiked import duty on gold jewellery from 10 percent to 15 percent. The hike in customs duty is aimed at containing the current account deficit.

MCX shares plunged more than 7 percent as FMC sources told CNBC-TV18 that Financial Technologies group's representation is set to reduce to one on mcx board from four now. MCX will be run like a public institution where board controlled by institutional shareholders, say sources.

Tata Power, NTPC, SBI, HUL and Dr Reddys Labs are top gainers in the Sensex. On the losing side are BHEL, Hero Motocorp, Sesa Goa, HDFC and M&M.

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This is a strong time for equities, that are likely to be in the green post the Fed’s decision on tapering its bond buying program (Quantitative Easing 3), says Richard Gibbs, global head, Macquarie Securities.

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Metals, IT, auto indices are in the red in late afternoon trade. BHEL, HDFC, Sesa Goa, Hero MotoCorp and M&M are top laggards in the Sensex. On the gaining side are Tata Power, NPC, HUL, Dr Reddy's Labs, SBI.

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The rupee gained 22 paise to 63.15 against the US dollar. It appreciated nearly 600 paise in two weeks from its record low of 68.8 per dollar touched on August 28.

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The Sensex is up 40.35 points or 0.20 percent at 19844.38, and the Nifty up 6.45 points or 0.11 percent at 5856.65. About 954 shares have advanced, 689 shares declined, and 117 shares are unchanged.

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Amit Trivedi, Co-Founder, is of the view that if Fed tapering is less than USD 10 billion then market is sure to rally and one could see Nifty 100-150 points up, to 6000-6100 levels. However, if there is bad news from Fed in terms of a roadmap on how the entire stimulus will be cut then market could see a sell-off.

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The Sensex is up 52.58 points or 0.27 percent at 19856.61, and the Nifty gains 22.55 points or 0.39 percent at 5872.75. About 212 shares have advanced, 85 shares declined, and 31 shares are unchanged.

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READ MORE ON  BSE Sensex, Nifty, Market, Indian Rupee


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