Sensex, Nifty bounce back; IT shares under pressure

Key benchmark indices bounced back in morning trade after opening on a negative note. At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 84.16 points or 0.22% at 39,196.90. The Nifty 50 index was up 28.40 points or 0.24% at 11,719.85. The Nifty was trading above 11700 mark.

In broader market, the S&P BSE Mid-Cap index was down 0.53%. The S&P BSE Small-Cap index was down 0.10%.

The market breadth, indicating the overall health of the market, was negative. On the BSE, 835 shares rose and 997 shares fell. A total of 81 shares were unchanged.

Shares of IT companies declined. Wipro (down 2.94%), Tech Mahindra (down 1.69%), Mphasis (down 1.10%), Oracle Financial Services Software (down 1.10%), TCS (down 0.70%), Infosys (down 0.58%), Hexaware Technologies (down 0.53%), HCL Technologies (down 0.11%) and MindTree (down 0.06%), all edged lower. While, Persistent Systems was up 0.51%.

Media reported that the United States has told India it is considering caps on H-1B work visas for nations that force foreign companies to store data locally. The move could have an adverse impact on Indian IT companies in the US. The H-1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise.

Oil and Natural Gas Corporation (ONGC) was up 0.72% to Rs 168.55. The company said that its wholly-owned subsidiary, ONGC Videsh, along with its joint venture partners of Mozambique Rovuma Offshore Area 1, announced final investment decision (FID) for initial two LNG train project development. The FID signifies that the Golfinho/Atum Mozambique LNG project will now advance to the construction phase.

Adani Green Energy (AEGL) was up 3.28% to Rs 40.95 after the company announced that it had won bids for setting up 600 MWac ISTS-connected wind-solar hybrid power projects in a tender issued by Solar Energy Corporation of India (SECI). The fixed power purchase agreement (PPA) tariff is Rs. 2.69/ kWh for a period of 25 years. Projects are expected to be commissioned by Q4 FY 2021.

Overseas, Asian stocks were trading higher Thursday after the US Federal Reserve left interest rates unchanged. Meanwhile, on the US-China trade front, hopes in Beijing appear to have risen for a trade deal between the two economic powerhouses. US President Donald Trump and Chinese Xi Jinping are reportedly set to meet at the upcoming G-20 summit in Japan, which will happen next week.

US stocks closed higher Wednesday after the Federal Reserve kept interest rates unchanged as widely expected but dropped the reference to "patient" in its statement to indicate it is ready to make ease monetary policy if needed.

The Fed said it will closely monitor the economy given increasing uncertainty about government policy though it signaled it may not need to lower rates before 2020. The central bank remained mostly optimistic about the economic outlook, but said inflationary pressures have receded, compelling it to lower its forecast for PCE inflation in 2019 to 1.5% from 1.8%, below its 2% target. At the same time, it left its gross domestic product estimate at 2.1%.

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