Sensex rallies 200 points ahead of GDP data; ICICI Bank gains over 3%

BSE Sensex rallied as much as 137 points during intra-day trades while Nifty 50 continued hold 8,150 levels

Benchmark indices extended gains in morning trade ahead of GDP data led by banking, capital good, consumer durables and healthcare sectors.

BSE Sensex rallied as much as 220 points during intra-day trades while Nifty 50 reclaimed 8,200 level.

At 2:42 pm, the S&P BSE Sensex was trading at 26,603, up 210 points, while Nifty50 was quoting 8,211, up 69 points. In Broader markets,  BSE Midcap was up 0.62% while BSE Small Cap was trading 0.98% higher. 

“While 8,280 region is where averages meet, and is expected to force a turn lower, retracement figures from September peak and November peak suggest that a turn lower could evolve earlier than that. Such a move should call for 8,070 initially and then 7,800. Alternatively, direct rise above 8,280 could open room for 8,280-8,380 or even 8,580 in an optimistic scenario,” said Geojit BNP Paribas in a technical note.

Hopes of strong GDP for September quarter helped investor sentiment. Reuters poll shows Indian economy will expand by 7.5% in July-September, accelerating from a 15-month low of 7.1% in the previous quarter but lower than 7.9% growth posted for the March quarter. Other forecasts are ranged from 6.5% to 8.7%.

The quarterly GDP data won't show the ill-effects of demonetisation. The impact from Modi's bold and risky move will be felt only in the December quarter. 

Fitch Ratings also lowered India’s GDP growth forecast for this fiscal to 6.9 per cent from 7.4 per cent, saying there will be “temporary disruptions” to economic activity post demonetisation.

Meanwhile, HSBC maintained "overweight" rating on Indian equities, saying "fundamentals are strong".

Sectors and Stocks

On BSE Sensex, ICICI Bank was the top gainer, up 3.52% followed by Maruti (2.85%), SBI (2.08%), and HUL (1.68%).

Lupin shares climbed nearly 2% intraday after receiving approval from the US health regulator for Nuvigil tablets that improves wakefulness.

Shares of Hindustan Construction Company rally over 2% after its board said it would consider issuance of equity shares as well as optionally convertible debentures to lenders under the scheme for the sustainable structuring of stressed assets.

Cement stocks gained strength today. Grasim, Ambuja Cements and ACC climbed over 2%.

Among losers, GAIl, RIL and Tata Steel fell 0.69%, 0.59% and 0.59% respectively.
 
Idea Cellular slipped over 2% after reports of Axiata selling its 20% stake in the telecom firm.
 
IDFC Bank has dipped 4% to Rs 68.15 on the National Stock Exchange (NSE) in intra-day trade after more than 2% equity of the bank changed hands through block deals.

Around 8.33 million shares representing 2.5% of total equity of IDFC Bank have changed hands via block deal on the NSE. 
 
Global Markets

Asian stocks rose to three-week highs on Wednesday, supported by gains on Wall Street and growing expectations the dollar may be peaking after a hefty rally since the US election pulled funds out of emerging markets.

Oil bounced as investors looked ahead to developments at the Organization of the Petroleum Exporting Countries (OPEC) meeting in Vienna later in the day.

A six percent rise in the dollar against a trade-weighted basket of currencies since Republican Donald Trump's upset U.S. election win has hammered emerging markets, as investors pulled money out in favor of U.S. dollar-based assets on bets Trump will boost fiscal spending, growth and inflation.

More than $16 billion have been sucked out of emerging markets in the two weeks following the Nov. 8 vote but stock exchange data in India, Indonesia, Philippines, Taiwan, Thailand and South Korea indicate the outflows may be slowing.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.3%, its highest since Nov. 11. Still, it is set for a second consecutive monthly drop in a sign of the uncertainty around Trump's presidency and the outlook for global growth.

Australian shares were down 0.5%, the Nikkei up 0.1% and South Korea 0.4% higher.