Sensex, Nifty end flat on caution ahead of Fed meet; GAIL, Tata Motors top gainers
Equity benchmarks ended a volatile session flat with a negative bias on Tuesday as investors turned cautious ahead of two-day US Federal Reserve monetary policy meeting that will start tonight.
The 50-share NSE Nifty started off trade on a positive note, hitting a fresh record high of 10,178.95 in opening but immediately turned flat and traded in a tight range for rest of the day.
The index closed down 5.55 points at 10,147.55 while the 30-share BSE Sensex fell 21.39 points to 32,402.37.
The market consolidation is likely to continue for a couple of days as investors awaited the outcome of Federal Reserve meeting, experts feel. They don’t expect a Fed rate hike.
“We believe that the rate hike in this meeting is definitely not coming, with the Fed fund futures also reflecting the same,” Motilal Oswal said.
The Fed may, however, start the normalisation of its balance sheet and that may not offer any major surprises to the market given that it has been well-publicised in the past Fed meetings, it added.
The broader markets mildly outperformed benchmarks as the Nifty Midcap index gained 0.05 percent and BSE Smallcap index rose 0.36 percent.
Asian markets also ended lower today while European indices were mixed at the time of writing this article.
Back home, Nifty Bank index closed flat. Auto and FMCG indices gained 0.2-0.6 percent but Metal, Pharma and PSU Bank fell 0.5-0.8 percent.
GAIL was the biggest gainer among Nifty 50 stocks, up 5.15 percent after Morgan Stanley upgraded the rating on the stock from underweight to overweight and increased the target price to Rs 522. It also expects an earnings CAGR of 16 percent over FY17-20 for the company.
Other gas stocks – Gujarat Gas and Indraprastha Gas also rose 1.5-3 percent after Morgan Stanley turned more bullish on gas utilities as it sees a multi-year growth cycle ahead.
Tata Motors rallied 4.6 percent as Tata Sons increased its stake in the company by 1.7 percent to 36.4 percent.
Tata Global Beverage gained 1.2 percent as Tata Chemicals sold its entire 7.1 percent stake in the company to Tata Sons through a block deal.
Bharti Infratel added another 2.4 percent gains today, on top of 4 percent rally in previous session after likely tower deal.
ICICI Bank was up 0.6 percent. The public issue of non-life insurance company ICICI Lombard, which closed today, fully subscribed.
Kotak Mahindra Bank, Tata Power, Ambuja Cements and BPCL were other major gainers among Nifty stocks, up 1-2 percent whereas HDFC, Reliance Industries, HDFC Bank, L&T, SBI and Coal India were down 1-2 percent.
Bharat Road Network lost 6 percent as three big investors, who received shares in allotment, sold nearly 25 percent of IPO size (2.93 crore shares) on Monday.
Somany Ceramics surged 5 percent as IIFL Securities has initiated coverage with a buy rating on the stock and expects a potential upside of 20 percent to Rs 967. The research firm expects revenue growth of the company will bounce back to 18 percent in FY19 and sees acceleration in tile segment & ramp-up of brownfield capacity.
Indiabulls Real Estate was up 4.4 percent as the stock moved out of F&O ban. Prestige Estates Projects gained 5 percent as a media report indicated that Canada’s CDPQ is in talks with the company to invest USD 200 million.
