Domestic equity markets settled higher on Wednesday, snapping a weakness witnessed for a couple of sessions. Investor sentiment got a boost after the RBI's monetary policy committee (MPC) decided to increase its key lending -- repo rate -- by 25 basis points (bps), on the expected lines. The recovery in the markets was also supported by upbeat global cues.
US Federal Reserve chief Jerome Powell's dovish speech, hinting towards lesser aggressive rate hikes, was taken well by traders across the globe. With the major events being left behind, the performance of the global indices, combined with earnings, would dictate the market trend ahead.
For the day, the 30-share pack BSE Sensex jumped 377.75 points, or 0.63 per cent, to 60,663.79, whereas Nifty50 Index settled at 17,871.70, gaining over 150 points, or 0.85 per cent. However, broader markets outperformed the headline peers as BSE midcap and smallcap indices settled added a per cent each. India VIX dropped about 4 per cent to 13.59-level.
Since there were no surprises in the RBI's MPC meeting and the 25 bps rate hike was in line with expectations, investors resorted to buying in IT, banking & other select front liners. Strong US market cues in overnight trades had boosted market sentiment, said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
"Technically, the Nifty has formed a bullish candle on daily charts which is broadly positive. However, 17,950 could be the next profit booking zone for the bulls. As long as the index is trading above 17,750, the uptrend wave will continue. Above the same, the market could move up to 18,150. On the flip side, below 17,750, the uptrend would be vulnerable," he said.
All the sectors of Nifty settled in green. Metal stocks led the gainers with a 4 per cent rally, whereas IT stocks jumped 2 per cent. Pharma index also gained over a per cent for the session.
Among the Adani stocks, Adani Enterprises soared over another 23 per cent, more than doubling investors' wealth in 4 sessions. Adani Ports surged 9 per cent. Adani Transmission, Adani Wilmar, NDTV and Adani Power hit an upper circuit of 5 per cent each, but Adani Total Gas and Adani Green Energy were down 5 per cent each. Ambuja and ACC ended flat.
Barring the Adani Group stocks, HDFC Life Insurance and SBI Life Insurance gained 5 per cent and 3 per cent, respectively in the Nifty50 pack. Bajaj Finance, Ultratech Cement, JSW Steel, Divis Labs and Reliance Industries gained 2-3 per cent, each.
Among the losers, Larsen & Toubro, Eicher Motors, Bharti Airtel and Hero MotoCorp dropped more than a per cent each. Axis Bank, HUL, Kotak Mahindra Bank, Tata Consumer and ONGC were along the other top losers.
Bulls took charge of the markets as the RBI’s MPC meeting delivered a smaller rate hike in line with market expectations. RBI has taken a more optimistic view on domestic growth by increasing the GDP forecast while cautiously keeping CPI inflation at 5.3 per cent for FY24, said Vinod Nair, Head of Research at Geojit Financial Services.
"Meanwhile, global markets traded with hopes as investors digested Powell’s speech, which stated that disinflation had begun but pointed towards the possibility of further rate hikes in response to a stronger job market," he said.
A total of 3,631 stocks traded for the day on BSE, of which 2,001 settled higher, while 1,490 settled higher. The remaining 140 stocks ended unchanged. A total of 173 stocks hit an upper circuit on BSE, whereas 194 stocks hit a lower circuit during the trading session.
One97 Communications (Paytm) surged over 15 per cent after the company reported strong quarterly performance and three major global brokerages upgraded the stock. Everest Industries and Patel Engineering surged 11 per cent, each, whereas Monarch Networth, Wonderla Holiday and D-Link India jumped 10 per cent, respectively.
Among the losers, Centum Electronics plunged 9 per cent after a flop show in December 2022 quarter. Kaya, Wardwizard Innovations & Mobility and Barbeque-Nation Hospitality tumbled 5-6 per cent each for the day.
Dynamic Cables, which settled lower, reported revenue from operations at Rs 158.80 crore in Q3FY23, compared to Rs 143.09 crore in the year-ago period. The net profit of the Jaipur-based company was Rs 6.63 crore in the December quarter.
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