Mumbai, India (BBN)-The Sensex failed to hold on to its early momentum and came off the day’s high due to profit-booking, but managed to close higher for the second day in a cautious trade ahead of the RBI policy meet announcement tomorrow amid mixed global cues.
Domestic sentiment was also buoyed as the rupee appreciated 31 paise intra-day against the dollar, gaining past the 68 mark to 67.90, reports The Hindu Business Line.
Another record closing on the US bourses gave much support as investors shrugged off Italian referendum outcome that led to the resignation of Prime Minister Matteo Renzi.
The 30-share BSE index Sensex ended higher by 43.66 points or 0.17 per cent at 26,392.76 and the 50-share NSE index Nifty closed up by 14.4 points or 0.18 per cent at 8,143.15.
Among BSE sectoral indices, realty index gained the most by 1.73 per cent, oil & gas 1.17 per cent, metal 0.74 per cent and PSU 0.58 per cent. On the other hand, FMCG index was down 0.77 per cent, consumer durables 0.73 per cent, auto 0.38 per cent and healthcare 0.02 per cent.
Top five Sensex gainers were HDFC (+2.07%), Tata Steel (+1.16%), ONGC (+1.08%), Adani Ports (+1.04%) and SBI (+0.95%), while the major losers were HUL (-1.24%), Maruti (-1.2%), Power Grid (-1.11%), Sun Pharma (-0.99%) and ITC (-0.95%).
Asian stocks posted their biggest rise in two weeks, with MSCI’s broadest index of Asia-Pacific shares outside Japan breaking two days of falls to gain 0.8 per cent.
Back home, the Reserve Bank of India is expected to cut interest rates at its monetary policy meeting after Prime Minister Narendra Modi’s currency crackdown rattled the economy, according to a Reuters poll.
The RBI’s recently formed Monetary Policy Committee is forecast to cut the repo rate by 25 basis points to 6.00 percent when it concludes its two-day meeting on December 7, according to the poll of nearly 60 economists this week.
“After yesterday’s short-covering, there is some consolidation now,” said Anand James, chief market strategist at Geojit BNP Paribas Financial Services.
Markets are supported by an expectation that there will be populist measures to ease the demonetisation pain, James said, adding that a 25 basis points cut in rates is largely expected.
Modi’s outlawing of high-value bank notes last month, aimed at curbing corruption and tax evasion, has left the nation’s 1.2 billion population scrambling to exchange old notes for new and left many companies’ cash-reliant supply chains in tatters.
The move has also raised concerns of a sharp slowdown in the economic growth of the fastest growing major country in the world.
A report by SMC Global said: “Asian stocks joined the global relief rally, as investors switched their focus back to the outlook for US monetary policy following the defeat of Italy’s constitutional referendum. US equities closed higher on Monday, unfazed by a key vote in Italy which led to Prime Minister Matteo Renzi’s resignation, as financials, technology and consumer discretionary stocks rose around 1 per cent. Labour cash earnings in Japan added just 0.1 per cent on year in October, government data revealed. That was shy of expectations for an increase of 0.2 per cent following the downwardly revised flat reading in September (originally 0.2 per cent). Real cash earnings were flat on an annual basis – again missing expectations for an increase of 0.2 per cent following the downwardly revised 0.8 per cent gain in the previous month (originally 0.9 per cent).”