Sensex, Nifty end rangebound session lower as investors await Fed meet outcome
The market closed flat with a negative bias after hovering in a tight range on Wednesday, as investors maintained cautious stance ahead the outcome of Federal Reserve monetary policy meeting due tonight.
The 30-share BSE Sensex was down 1.86 points at 32,400.51 while the 50-share NSE Nifty failed to hold 10,150 level, down 6.40 points at 10,141.15.
“This sideways range movement could continue for the next 1 or 2 sessions, before showing further upside bounce back for near term,” Nagaraj Shetti, Technical Research Analyst, HDFC securities said.
Experts expect the Federal Reserve to hold rates in the policy meeting but the key thing to watch out for would be its commentary on unwinding of USD 4.5 trillion balance sheet.
“The Fed is widely expected to begin slowly unwinding the USD 4.5 trillion portfolio of bonds and other assets it accumulated via its asset purchase program in the wake of the financial crisis,” Globe Capital said.
Global markets were also mixed ahead of statement from the Federal Reserve.
Back home, the broader markets also closed flat with a negative bias on weak breadth. About 1,356 shares declined against 1,219 advancing shares on the BSE.
Private banks and auto stocks were under pressure while PSU banks and index heavyweights (ITC, Reliance Industries and HDFC) supported the market.
Telecom stocks were under pressure as Idea Cellular was down 3.4 percent and Reliance Communications declined 1.7 percent after telecom regulator TRAI slashed mobile call connection charge to 6 paise per minute from 14 paise, effective October 1. However, Bharti Airtel recouped its early losses in morning itself and ended with half a percent gains despite analysts said there could be pressure on EBITDA due to cut in connect charge.
Reliance Industries settled the trade with a percent gain after hitting a fresh record high of Rs 872.10 intraday. CLSA reiterated its buy call on the stock and raised target price to Rs 1,050 (from Rs 990 earlier), citing IUC cut.
Tata Steel rose 1.66 percent after signing a 50-50 joint venture with German-based thyssenkrupp AG for its European operations.
Mahindra and Mahindra ended flat after it purchased two companies in Turkey – Erkunt Tractor for Rs 478 crore and Erkunt Foundry for Rs 322 crore.
Larsen & Toubro gained nearly a percent as L&T Hydrocarbon has received order worth Rs 1,700 cr crore Kuwait. The order will be completed in third quarter of 2020.
Dr Reddy’s Labs was up 3.3 percent. The USFDA has issued 3 observations to its Mirfield plant in UK after inspection during September 11-15, but these observations are procedural in nature.
ONGC gained a percent as a media report indicated that the latest discovery of the company to the west of its Mumbai High offshore fields is estimated to hold in-place reserves of about 20MT.
Among others, ITC, HDFC, State Bank of India and Bank of Baroda gained 1-3 percent whereas ICICI Bank, IOC, Tata Motors, HUL, Hero Motocorp, BPCL, Kotak Mahindra Bank, Sun Pharma and IndusInd Bank fell 1-2 percent.
In broader space, Divis Labs surged 9 percent. Its unit 2 received six observations from USFDA but all its previous observations are resolved after inspection during September 11-19.
ABB India gained 2 percent after Axis Capital has upgraded its rating on the stock to buy and also raised target price to Rs 1,750 per share (from Rs 1,400). It feels exports & railways will be next growth drivers for ABB.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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