MUMBAI : Indian markets rebounded from its one month low and closed 0.5% higher led by gains in public sector and information technology stocks. Investors await the outcome of the US Federal Reserve meeting, due later on Wednesday.
The benchmark Sensex gained 0.43% or 172.69 points to closed at 40412.57 points while Nifty advanced 0.45% or 53.35 points to 11910.15 points. On Tuesday, the indices closed at a one month low on macro concerns.
PSU stocks rallying on the hopes of re-rating in the overall asset class after government announced divestment of several companies which includes Bharat Petroleum Corp, Concor. Gail India advanced 5.4%, NTPC gained 3%, Indian Oil Corp 3%, Oil & Natural Gas Corp Ltd advanced 2.3%, Power Finance Corp 2.6%, NBCC 2.6%.
After falling for two straight session, IT stocks rebounded. Tech Mahindra, Tata Consultancy Services, Infosys Ltd and HCL Technologies gained between 0.5-2%.
Yes Bank fell 15% to hit an eight-week low after two large brokerages Nomura Research and Macquarie Research raised questions about the future of the lender after its board further delayed decision on new investors. Macquarie Research in its note “Nationalisation Looms” said, if the bank is unable to raise money in the next six months it poses a grave danger to the financial system.
Larsen & Toubro fell 2% to closed at a nine month low. The stock has fallen 14.5% since start of the November while so far this year it declined 12.3%. The stock is under pressure, since new Maharashtra government has come in to power, on the expectations that the delay in awarding new projects and hardening of working capital cycle.
Godrej Consumer Products Ltd climbed 3.3% after brokerage firm Morgan Stanley has maintained its ‘overweight’ rating with target price of ?845 a share, up 30.7% on the hopes that the company may report increase in domestic volume growth.
CSB Bank Ltd fell 7.2%. The stock closed lower for firth consecutive session and declined nearly 20% in this period. The stock listed on 4 December and surged nearly 54% on debut.
US markets closed weaker while Asian indices ended mixed. European stocks were trading lower amid concern the US will go ahead and increase tariffs on China imports as scheduled on Sunday. Investors remain cautious ahead of U.K. elections and a Fed’s rate decision.
“After a subdued trade during most part of the day, market witnessed a sharp turnaround due to short covering in index heavyweights. Upcoming macro indicators like CPI inflation & IIP data are unlikely to paint a rosy picture which may reduce upside potential in the near term. On global front, FOMC meeting, UK election and US tariff deadline remain key events”, said Vinod Nair, Head of Research at Geojit Financial Services.
News Source:- livemint