Mumbai, India (BBN) – The benchmark BSE Sensex was trading higher by nearly 200 points and the NSE index Nifty above 8,260 on positive global cues after US Fed minutes suggested a less hawkish stance from policymakers.
Brokers said the domestic sentiment was buoyed due to value-buying in blue-chips and a firm trend in Asia boosted by overnight gains in the US, reports The Hindu Business Line.
The US shares rose after minutes of Federal Reserve’s December meeting signalled a less aggressive stance on rate hike.
At 1:35pm, the 30-share BSE index Sensex was up 218.58 points or 0.82 per cent at 26,851.71 and the 50-share NSE index Nifty was up 75.45 points or 0.92 per cent at 8,265.95.
Among BSE sectoral indices, metal index gained the most by 3.1 per cent, infrastructure 1.88 per cent, and PSU 1.4 per cent.
Top five Sensex gainers were Adani Ports (+4.54 per cent), Tata Steel (+4.07 per cent), ONGC (+2.65 per cent), Tata Motors (+2.57 per cent) and ICICI Bank (+2.15 per cent), while the major losers were TCS (-1.31 per cent), M&M (-0.37 per cent), Infosys (-0.27 per cent), and HDFC Bank (-0.27 per cent).
Traders said the Indian market would ultimately be driven by corporate earnings, with Tata Consultancy Services and Infosys scheduled to post their quarterly results on January 12 and January 13, respectively.
India is also gearing up to its annual budget, and investors hope Prime Minister Narendra Modi’s government would keep spending under control and promote growth after its move to ban higher-value banknotes paralysed large parts of the economy.
“The budget is expected to be fiscally disciplined, with hopes that the government may take measures to boost economic recovery post the demonetisation impact,” said Tirthankar Patnaik, India strategist at Mizuho Bank.
“The key driver for markets will be earnings growth. Due to the impact of demonetisation, we believe that earnings growth numbers will pare down initially.”
A report by SMC global said: “Asian stocks edged higher on Thursday, underpinned by a firm Wall Street after minutes from the Federal Reserve’s December meeting suggested a less hawkish stance from policymakers. US shares ended higher on Wednesday even after minutes from the Federal Reserve’s December meeting showed concerns that quicker economic growth under President-elect Donald Trump could require faster interest rate increases to ward off inflation.The FOMC minutes suggested a less hawkish stance from policymakers. However, the FOMC dot plots project three interest rate hikes in 2017. However, the market is less optimistic with Fed Fund futures pricing in two hikes as The FOMC minutes noted upside risk to growth forecasts and uncertainty over the level of fiscal stimulus.’’