Benchmark indices eked out gains for the second straight session as investors hoped that the US Federal Reserve will not be too harsh when it announces a key decision on Wednesday amid resilient economic activity back home.
Though some of its global peers were worried about aggressive rate hikes by the FOMC, the 30-share BSE Sensex rose 578.51 points, or 0.98 per cent, to settle at 59719.74, after rallying 964.56 points or 1.63 per cent to 60105.79.
Similarly, the broader NSE Nifty gained 194 points, or 1.10 per cent, to end at 17816.25. Market circles said investors expect the Fed to go for another 75 basis point hike on Wednesday. “Though the Fed chairman’s commentary will be keenly watched, a 75 basis point increase has been discounted by the markets. However, if rates are raised by 100 basis points, it could hurt the sentiments,’’ an analyst said.
He added that positive news flow on the country’s economic activity amid the festival season is also supporting the risk-on sentiment. Sun Pharma was the top gainer among the Sensex constituents, rising 4.71 per cent. It was followed by IndusInd Bank, Dr Reddy’s, Tata Steel, Titan, Bajaj Finserv, ICICI Bank and Asian Paints, which rose up to 3.12 per cent.
Shares of Bharti Airtel were also in demand with the stock hitting a 52-week high of Rs 796.60. This comes after promoter entity Bharti Telecom purchased a 1.76 per cent stake for Rs 7,128 crore nearly a fortnight ago. “The weakness of western markets did not affect the buoyant domestic market. The Indian market is not seemingly apprehensive of Fed policy. Buying on dips is the strategy being reinforced here. Even the lagging IT and pharma stocks joined the rally, slowly emerging as a value pick for long-term investors.
“However, to sustain the trend, the global market needs to stabilise. It makes sense to be stock and sector-specific in this unfavourable global economic scenario and highly premium valuation of India compared with the rest of the world,” said Vinod Nair, head of research at Geojit Financial Services.
In the broader market, the BSE midcap index rallied 1.65 per cent and the smallcap gauge jumped 1.01 per cent. At the forex markets, the rupee closed with marginal gains at 79.75 compared with the previous close of 79.77 against the greenback.
India Inc on alert
Businesses need to be prepared for the possibilities of a continued or higher inflation and deflation of commodity prices in the next 2-3 years, Hindustan Unilever CEO and MD Sanjiv Mehta said on Tuesday.
The unprecedented inflation is not homegrown but has been caused by several global factors, including supply chain disruption because of the pandemic and the Ukraine-Russia war, he said at the Ficci Leads 2022.
“We have to be ready with three scenarios. Inflation or a slight deflation will continue at a moderated pace from the elevated base today. The second is it could go up even further and the third is there could be a deflation in commodity prices.” (PTI)
