Markets erase early gains, Nifty holds 7,750; oil shares drag

ONGC, M&M, HDFC, Infosys and Maruti Suzuki are the top 5 Sensex losers, down 0.3%-2%

 

Markets have trimmed gains and are trading marginally positive led by metal shares. The upside is capped due to selling pressure among select oil shares and index heavyweight shares like HDFC and Infosys.

By 10:20 am, the S&P BSE Sensex was higher by 16 points at 25,511 and the Nifty50 gained 5 points at 7,756 after hitting intra-day high of 7,800 mark.

The top gainers from the Sensex pack are Tata Steel, GAIL, Hindalco, SBI and Vedanta. ONGC, M&M, HDFC, Infosys and Maruti Suzuki are the top 5 Sensex losers, down 0.3%-2%.

ONGC is the top Sensex loser, down over 2% on account of profit booking at higher levels. Cairn India has also slumped by 2%. Oil & gas stocks surged yesterday on the back of recovery in the crude oil prices as it bounced back from the multi-year lows.

Metal shares like Tata steel, Hindalco and Vedanta are trading firm, all surging between 1.5%-2.3%. Industrial commodities including base metals and energy might decline further following a 25 basis point interest rate hike by the US Federal Reserve.  

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Updated at 9:30 am

Markets opened higher extending gains for the fourth straight session after the US Federal Reserve increased its benchmark interest rate by 25 basis points as widely expected at the conclusion of its two-day meeting on Wednesday.

"After seven years of the most accommodative monetary policy in US history, the Fed, as widely expected, approved a quarter-point increase in its target funds rate. Rate hike as expected, in line with street estimate, and in short comment of Yellen, that rate hike going forward will be gradual and data driven," adds Rahul Shah, Vice President -Equity Advisory Group, Motilal Oswal Securities.

By 9:25 am, the S&P BSE Sensex was higher by 116 points at 25,610 and the Nifty50 gained 36 points at 7,786 after hitting intra-day high of 7,800 mark.  Broader markets are outperforming- BSE Midcap and Smallcap indices are up almost 1%.

"Nifty50 has formed higher top higher bottom pattern on the daily chart post “Piercing line” formation, where we have observed improvement in the overall market participation level as compared to previous trading sessions. Our technical view is negative on the index, but we believe that any stable move above 7,850 mark (junction of inter-mediate falling trend line and 23.6% Fibonacci Extention level of prior fall) will bring near-term positivity in the market and that will help NIFTY to visit its medium to long-term moving averages (placed in the range of 7,900-8,250),” Reliance Securities said in a note.

“As mentioned earlier, on the lower side, 7,540-7,500 range (20-days EMA & intermediate falling trend line) will work as a strong support zone. As for the day, support is placed at 7,700 and then at 7,600 levels, while resistance is observed at 7,800 and then at 7,850 levels", Reliance Securities said in a note,” the note further adds.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 503.22 crore yesterday as per provisional data released by the stock exchanges.

Sentiments also remain upbeat after Finance Minister Arun Jaitley said yesterday that the government will achieve its fiscal deficit target without any cuts in this financial year.

In the currency front, the rupee appreciated by 13 paise at 66.60 against the US dollar in early trade today on increased selling of the American currency by exporters even as the US Federal Reserve raised interest rates for the first time in nearly a decade.

In the overseas market, Asian stock markets jumped today as investors chose to take an historic hike in US interest rates as a mark of confidence in the world's largest economy, though the good cheer did not extend to oil where oversupply again pressured prices.

The Federal Reserve's 25-basis-point increase was almost a decade in the making and easily one of the most telegraphed in history.

Japan's Nikkei added 1.9%, on top of Tuesday's 2.6% advance. Australian stocks climbed 1.6%, while South Korea put on 0.8%.

Back home, bank shares are witnessing some upmove on account of short covering. Bank Nifty has surged by almost 1% at 16,724.

SBI, ICICI Bank, Axis Bank and HDFC Bank have surged between 1%-2%.

GAIL has extended gains for second straight day and is the top Sensex gainer, up 2%. The Supreme Court on Wednesday banned the registration of new diesel luxury cars and sport utility vehicles with an engine capacity of over 2000 cc in Delhi until 31 March 2016.

NTPC remains in buying radar after the Ministry of Environment and Forests has given 'green signal' to a power project being set up by the company in Telangana while it has deferred another project of the PSU in Andhra Pradesh.

BHEL has extended gains and is up almost 1%. The company announced that it has commissioned 500MW thermal power unit in the state of West Bengal.

Shares of Suzlon Energy has surged over 3% after Dilip Shanghvi- controlled entities, along with promoters of Suzlon, will make an open offer worth Rs 2,837 crore to acquire 26% stake in the wind energy turbine maker.

Logistic companies are witnessing selling pressure after the expectation of the passage of the goods and services tax (GST) Bill has became remote because of the continuing disruption of parliamentary proceedings by the Opposition. GATI, VRL Logistics and Sical Logistics are down between 1-2%.


With Reuters input