Market Live: Sensex, Nifty open flat ahead of Fed meet outcome; Dr Reddy#39;s up 2%
10.05 am Market Check: Equity benchmarks were marginally under pressure amid volatility as investors remained cautious ahead of outcome of Federal Reserve meeting tonight.
The 30-share BSE Sensex was down 1.79 points at 31,101.70 and the 50-share NSE Nifty fell 14.25 points to 9,592.65.
The market breadth was also negative as about 1,057 shares declined against 867 advancing shares on the BSE.
“The Federal Reserve is expected to result in rate hike of 25 bps,” Motilal Oswal said. This would be fourth rate hike in this cycle, third in last six months and Fed has managed market expectations quite well so far.
We haven’t seen any major market tantrums despite three rate hikes that have already happened and current hike is also largely factored in, the research house feels.
According to Motilal Oswal, the language of Federal Reserve, however, could offer some scope of surprise. It believes markets are likely to see a dovish hike rather than a hawkish hike. This means that while a rate hike will happen, the Fed will tone down the language to suggest that the next rate hike may not happen very soon, the research house said.
It believes that after this hike, a third rate hike this year will happen only in December.
9:44 am Buzzing: Nifty PSU Bank index gained nearly half a percent in morning trade after the Reserve Bank of India announced steps to speed up NPA resolution process by identifying 12 accounts that can be immediately taken up under the Insolvency and Bankruptcy Code (IBC).
Syndicate Bank, Bank of Baroda, State Bank of India and Oritenal Bank of Commerce gained upto 1.5 percent.
“12 accounts totaling about 25 percent of the current gross non-performing assets of the banking system would qualify for immediate reference under IBC,” the RBI said.
9:28 am Earnings growth: Ridham Desai of Morgan Stanley said broad market revenue and net profit growth gained pace at 10 percent YoY and 20 percent YoY, respectively. Earnings growth was the fastest since June 2013, he added.
Even as corporate India witnessed EBITDA margin compression, net margins expanded during the quarter, he said.
Desai expects revenue growth acceleration to persist in the coming quarters. He sees FY18 YoY earnings growth for Sensex of 18 percent and for the broad market of 20 percent.
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9:15 am Market Check: Equity benchmarks started off Wednesday’s trade on a flat note as investors await the outcome of two-day Federal Reserve policy meeting due tonight.
The 30-share BSE Sensex was up 28.79 points at 31,132.28 and the 50-share NSE Nifty rose 2.85 points to 9,609.75. About 596 shares advanced against 364 declining shares on the BSE.
Reliance Industries, ICICI Bank, TCS, Infosys, Lupin and Dr Reddy’s Labs were early gainers while Asian Paints, HDFC, ITC, HDFC Bank and Tata Steel were losers.
Stressed assets stocks like Videocon, Bhushan Steel and Electrosteel Steels fell more than 5 percent while Hexaware declined 4 percent on a media report that revenue from EY declined.
Raymond was down 3 percent as SEBI initiated enquiry on company while tyre stocks fell further, Ceat and Balkrishna Industries down 1 percent each.
The Indian rupee opened flat at 64.34 per dollar today against previous close 64.33 a dollar.
Pramit Brahmbhatt of Veracity feels the rupee will appreciate and may test 64.20/dollar. Trading range for the spot USD-INR pair for the day will be 64.20-64.50/dollar, he said.
Equities in Asia were mixed as oil prices fell after a surprise build in US stocks and as markets awaited the release of economic data from China. Japan’s Nikkei 225 was up 0.1 percent and South Korea’s benchmark Kospi index slipped 0.18 percent.
Oil prices fell after data showed a build in US crude stocks and OPEC reported a rise in its production despite its pledge to cut back. Brent crude futures were at USD 48.37 per barrel, down 0.72 percent, from their last close. US West Texas Intermediate (WTI) crude futures were at USD 46.05 per barrel, down 0.88 percent.
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