Nifty snaps losing streak

 

The Nifty edged higher on Wednesday, snapping two days of falls, as oil explorers rose after recent sharp falls, while some firms seen as sensitive to rates extended recent rallies on hopes the Reserve Bank of India (RBI) would ease policy early next year.

Investors also remained in profit-taking mode for other recent outperformers, including State Bank of India after the Nifty hit a record high on Monday.

Sentiment remains largely positive on hopes for an improving economy and after the Reserve Bank of India said it could cut interest rates early next year depending on inflation.

A business survey showed activity in India's services sector expanded at its fastest rate in five months in November.

"Market outlook is range-bound for the medium-term. There could be profit-taking in recent outperformers. We advise clients to be invested, but stick to quality companies as there is a clear lack of near-term triggers," said Suresh Parmar, head, institutional equities at KJMC Capital Markets.

The benchmark BSE Sensex closed flat at 28,442.71 points, while the broader Nifty ended 0.15 per cent higher at 8,537.65.

Oil explorers were among the leading gainers after Brent crude recovered, although markets remained turbulent as investors search for a price floor after a nearly 40 percent fall since June.

Oil and Natural Gas Corp closed up three per cent, Reliance Industries gained 0.6 per cent, while Cairn India rose 1.4 per cent.

Some interest-rate sensitive shares gained on hopes the RBI could ease monetary policy at its February review. Some analysts believe the RBI could even cut the policy rate by 50 basis points.

Mahindra and Mahindra ended up 1.8 percent, while ICICI Bank closed up 1.3 percent.

Defence related stocks rose for the second day after the government notified foreign investment in the sector to up to 49 percent.

Astra Micro Wave Products closed up 4.8 percent, adding to the previous session's gain. Bharat Electronics Ltd ended up 4.7 percent.

Among the decliners, State Bank of India fell 0.2 percent on profit-taking after gaining 5.2 percent in the last week ahead of the central bank's policy.

Pratibha Industries ended 5.8 percent lower after rating agency Crisil downgraded the stock.