Sensex, Nifty open higher; Ashiana Housing jumps 15%; Sobha drops 5%

Dalal Street opens higher on Wednesday, tracking firm global cues. However, the benchmark indices gave up their gains as the session progressed. All eyes would be looking at the US FOMC meeting outcome which is likely to be announced later in the day.

A hike of 25 basis points is most expected by the Street to tame the sticky inflation but uncertainty in the banking sector is also weighing on the sentiments. Back home, the unseasonal rains this week have caused large-scale crop damage across large swathes of India.

At 9.20 am, the 30-share pack BSE Sensex was trading 260.78 points, or 0.45 per cent, higher at 58,335.46, while NSE's Nifty50 jumped 96.90 points, or 0.57 per cent, to 17,204.40. Broader markets rose in tandem with headline peers as BSE midcap and smallcap indices added half a per cent, each. Fear gauge India VIX calmed over 2 per cent to 14.71-level.

The index started the session on a positive note and traded in the 100 points range amid stock-specific action. The daily price action formed a bull candle carrying higher high-low. The index has anchored ongoing corrective moves around the lower band of the falling channel amid oversold conditions, said ICICIDirect Research.

"Going ahead, an immediate hurdle of 17,200 would be the key monitorable as sustainability above the same would open the door for a meaningful pullback towards 17,600 by the end of March 2023, as its confluence of 200 days EMA coincided with last week’s high. Thus, traders should refrain from creating aggressive short positions," it said.

Barring the Nifty Media index, all other sectoral indices were trading in green during the early trade on Wednesday. Nifty IT and Metal index jumped about a per cent, each. They were followed by Nifty Auto, Realty and PSU Bank indices.

In the Nifty 50 pack, HDFC Life and SBI Life topped among the gainers, rising about 3 per cent, each, followed by Tata Consumer Products which gained 2 per cent. HCL Tech, Tata Motors, Hindalco, UPLand Larsen & Toubro added over a per cent each.

On the downside, Bharat Petroleum Corporation and Coal India plunged about a per cent each. Power Grid, Asian Paints, NPTC and Cipla were also among the top losers among the blue-chip counters.

Today’s Fed decision will be crucial in determining the direction of the market. The most likely outcome will be a 25bp hike in rates along with assurances of financial stability. Since inflation continues to be high and unemployment is at record lows the Fed has to keep its vigil on price stability, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

"If the Fed decision is a pause, there will be a strong rally in markets. There is no fear in the market unlike during the Global Financial Crisis of 2008," he said. "Investors should remain cautious and wait for stability to emerge. Safety is in large caps. Long-term investors can nibble at high quality large caps."

In the broader markets, VST Tillers Tractors rallied about 16 per cent ahead of the Monsoon season. Ashiana Housing gained over 15 per cent after the company announced its annual booking hit Rs 1,278.84 crore as of March 20, 2023. Hindustan Zinc jumped about 5 per cent after the announcement of a fourth interim dividend.

Realty company Sobha declined about 5 per cent as the company was informed about a search carried out by the Income Tax Department in office and other premises. CSB Bank and Aarti Drugs were among other losers as both stocks fell up to 4 per cent, each.

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