Sensex rises 500 points on easing oil prices, US rate hike worries; Nifty nears 19,800

Indian equity indices traded higher for the second consecutive day on Wednesday, tracking global markets, on easing US rate concerns following further dovish comments by key Federal Reserve officials and stability in oil prices. Buying was seen across all sectors.

The BSE Sensex was trading 500 points higher at 66,538. Nifty50 was trading at 19,827, up 136 points at around 10.50 am.

From the Sensex stocks, Axis Bank, ICICI Bank, L&T, Wipro, and Tata Motors opened with gains, while only Power Grid Corporation opened with cuts.

Bank of Baroda shares opened nearly 4% lower after the Reserve Bank of India (RBI) barred lender from adding customers to its mobile app.

Sector-wise, Nifty Auto rose 0.7%, and Nifty Media surged 0.9%. Banks, financial, IT, FMCG, metal and pharma sectors also opened higher. In the broader market, Nifty Midcap100 gained 0.93%, and Smallcap100 rose over 1%.

Experts Take
"It is important to appreciate the fact that even in the midst of the West Asian crisis, markets are resilient, globally. The fundamental support to the market comes from the resilience of the US economy, the declining US bond yields and the hope that the Israel-Hamas conflict will remain a localised crisis which will not impact crude prices," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

However, investors should remain cautious since the situation taking a turn for the worse cannot be ruled out, Vijayakumar suggested.

Deepak Jasani, Head of Retail Research at HDFC Securities, said, "Nifty could now head towards 19766 and later 19878, while 19589 could provide support in the near term."

Global Markets
Asia extended a global markets rally Wednesday on a growing belief the Federal Reserve is finished with its interest rate hiking cycle, while optimism was also boosted by a report that China is considering a large burst of economic stimulus. In early Asian trade Tokyo, Sydney, Seoul, Taipei, Manila and Jakarta were all up.

Meanwhile, Wall Street indices closed higher on Tuesday, to notch their third straight day of gains, after dovish comments from US Federal Reserve officials pushed Treasury yields lower as investors cautiously monitored developments in the Middle East.

The Dow Jones Industrial Average rose 0.4%. The S&P 500 gained 0.52%, and the Nasdaq Composite surged 0.58%.

Q2 Earnings
Investors also await the September quarter earnings of top information technology company Tata Consultancy Services, due later in the day. Delta Corp will also release its Q2 results today.

Other IT service providers like HCL Tech and Infosys are scheduled to report their results on Thursday.

FIIs remain net sellers
Foreign institutional investors (FIIs) extended their selling streak for the 15th consecutive session on Tuesday, offloading Indian shares worth a net of Rs 1,005 crore. Domestic institutional investors (DIIs) bought shares worth Rs 1,963 crore.

Oil Rises
Oil edged higher on Wednesday as investors grappled with the prospect of supply disruptions due to the Middle East turmoil.

Brent crude rose 26 cents, or 0.3%, to $87.91 a barrel. US West Texas Intermediate (WTI) crude rose 17 cents, or 0.2%, to $86.14 a barrel.

Currency Watch
The Indian rupee rose 3 paise to $83.22 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.04% to 105.78 level.


(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times