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Benchmark indices have erased early gains and are off day's high on acoount of profit booking at higher levels. FMCG shares are witnessing some selling pressure.
The rupee recovered sharply on Wednesday as the Reserve Bank of India (RBI) aggressively sold dollars to prevent the currency from falling to a record low amid volatility in global markets over the US push for limited US strikes on Syria.
Traders also cited hopes that Raghuram Rajan, who takes over at the RBI on Wednesday, will bring a new approach to the central bank's defence of the rupee, which has so far relied on a risky strategy to drain cash and raise short-term interest rates.
The partially convertible rupee was trading at the day's high of 66.80/81 per dollar at 11:35 am, stronger than its close of 67.63/64 on Tuesday.
At 13:00 PM, the 30-share Sensex surged 269 points at 18,504 and the 50-share Nifty gained 89 points at 5,430 levels. The Sensex and Nifty have touched an intra-day high of 18,612 and 5461 levels, respectively.
According to Devangshu Datta, Technical Analyst, “The immediate resistance for Nifty is at 5,475 with support at 5400 or 5375. Nifty is likely to trade in the range of those limits - 5400-5475. Breakouts could go till 5325 or 5525.”
On the global front, Asian stocks snapped a four-day winning streak on Wednesday and safe assets like gold consolidated chunky overnight gains after President Barack Obama clinched the backing of two key figures in Congress in his drive for limited U.S. strikes on Syria.
The U.S. dollar stood tall even as risk appetite ebbed, on course for its best five day performance in two months against a basket of currencies as a stronger-than-expected slate of U.S. data emboldened greenback bulls.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent after four days of gains. Philippines and Indonesia's stocks led declines in the region.
Back home, BSE Oil & Gas index has surged by nearly 3% followed by counters like Banks, Auto, Metal, Capital Goods, Healthcare, IT and PSU, all gaining between 1-2%. BSE Realty index has surged by almost 2%.
Index heavyweight RIL has surged by over 3%. Reliance Industries is evaluating investing multi-billion dollars in 2-3 oil blocks offered by Venezuela as it looks at countries from Myanmar to Canada to expand its overseas energy assets.
Shares of auto makers are in focus on the bourses on hopes of a stimulus package from the government to revive the sector.
Tata Motors, Hero MotoCorp, Ashok Leyland, Mahindra and Mahindra (M&M) and Bajaj Auto are trading higher by 1-6% on the Bombay Stock Exchange (BSE).
IT shares have gained on improving business outlook and rupee depreciation, dealers say. TCS and Infosys have gained between 2-3%.
BHEL is the top Sensex gainer, up over 5%. Other notable gainers are Bharti Airtel, Hindalco, ICICI Bank, r Reddy’s and Cipla.
Shares in real estate companies fell after the Reserve Bank of India (RBI) said late on Tuesday that housing loans from banks to individuals should be closely linked to the stages of construction.
Upfront disbursal of lump sum loans should not be made in case of incomplete or housing projects under construction, the central bank said.
DLF, Indiabulls Real Estate and HDIL are down between 3-4%.
JSW Steel is trading higher by 3% at Rs 540 on reports that the company raised steel price by Rs 700-Rs 2,500 per tonne due to sharp fall in Indian rupee against the US dollar in past two months.
Ipca Laboratories has soared 9% to Rs 705 after the pharmaceutical company said it has received US-FDA approval for its oral solid dosage formulations manufacturing facility situated in Madhya Pradesh.
The market breadth in BSE remains healthy with 1,225 shares advancing and 702 shares declining.
