Markets brace for Fed action

Sensex and Nifty were trading higher by 106 and 40 points respectively on back of improved macro numbers

Two days ahead of the US Federal Reserve meeting, Indian shares ended higher on Monday after touching a  three-month low earlier in the session. The Sensex was trading at 106 points or 0.4 per cent higher and closed at 25,150. The Nifty was trading higher by 40 points or 0.5 per cent and closed at 7,650.   

Markets on Monday gathered pace after a weak opening due to favourable macroeconomic numbers with  October industrial production up 9.8 per cent and wholesale prices falling for a 13th straight month in November quoting at -1.99 per cent.

However, anxiety continues to prevail at the D-Street ahead of the US Federal Reserve meet due later this week. It is expected that Fed could raise rates by 25 basis points.

“Key benchmark indices started the week on a positive note after touching more than a three-month low earlier in the session. While investors resorted to some value buying, there seems to widespread caution ahead of the Fed’s meeting on the 16th of this month. India’s volatility index rose to a near one month high to trade above 18 levels,” said Shreyash Devalkar, fund manager, Equities, BNP Paribas Mutual Fund.

Meanwhile, rupee is trading over two-year low of 67.06 against the US as greenback strengthened on prospects of a Fed hike.

Also, oil prices sank to fresh seven-year lows with Brent below $39 a barrel for the first time since December 2008.

Foreign institutional investors were net sellers on Monday and sold shares worth Rs 157 crore. Domestic institutional investors, on the other hand, were net buyers and bought shares worth Rs 386 crore in the capital markets segment.

Metal and basic materials were the gainers for the day, which closed up around 2.4 per cent and 1.6 per cent, respectively, in the sectoral front. The losers were realty and oil & gas which ended down around 0.2 per cent and 0.1 per cent, respectively.

The gainers were Adani Ports and Hindalco, closed up around 5.7 per cent and 3.7 per cent, respectively. The losers, on the other end, were Axis Bank and Tata Motors down to about 2.1 per cent and 1.6 per cent, respectively.

Another prominent gainer in Monday’s trade was Maruti Suzuki up 1.9 per cent on talks that Japan will import cars manufactured in India by Maruti Suzuki.

Among individual names, Jindal Stainless, Maharashtra Seamless and ISMT gained up to 11 per cent.  Meanwhile, JSW Steel and Tata Steel gained between two per cent -5 per cent on prospects that the import duty could be imposed on other categories of steel as well.