Market Wrap: Sensex, Nifty rise despite weak global cues; US Fed outcome in focus

US stocks futures and top European markets were subdued when the Sensex closed as the Fed is likely to raise rates by 25 bps today which will push benchmark rates to their highest level in 22 years.

“The Federal Reserve is likely to raise its benchmark policy rate by 0.25 percentage point to a range of 5.25 per cent to 5.5 per cent, a 22-year high. But recent growth has likely been too brisk for the central bank’s chair, Jerome Powell to signal this will be the last hike of this tightening campaign,” reported Wall Street Journal.

US inflation Inflation cooled to its slowest pace in more than two years in June. As per reports, the consumer-price index climbed 3 per cent in June from a year earlier. 

US inflation is still above the Fed’s target of 2 per cent but market participants hope that a significant decline in inflation may make the Fed think about ending its rate hike cycle.

Read more: US Fed decision today: Will it be the last hike of the current cycle? How could it impact the Indian market?

Stock Market Today

Sensex opened 79 points higher at 66,434.72 against the previous close of 66,355.71 and remained in the green throughout the session, hitting the intraday peak of 66,897.27. The index finally closed 351 points, or 0.53 per cent, higher at 66,707.20. The Nifty50 closed with a gain of 98 points, or 0.50 per cent. at 19,778.30.

Mid and smallcaps, too, ended in the green but they underperformed the benchmark Sensex. The BSE Midcap index closed 0.34 per cent higher at 29,852.88 after hitting its fresh record high of 29,913.5 during the session. The Smallcap index closed 0.22 per cent up at 34,355.33 after hitting its record high of 34,471.92.

The overall market capitalisation of BSE-listed firms rose to 303.9 lakh crore today from 302.6 lakh crore in the previous session, making investors richer by 1.3 lakh crore in a single day.

As many as 236 stocks, including Bharti Airtel, Larsen & Toubro, NTPC, Sun Pharma and Tata Motors, hit their fresh 52-week highs in intraday trade o BSE.

Meanwhile, crude oil prices witnessed some volatility ahead of the US Fed interest rate decision. Brent Crude traded about a per cent lower to trade near the $83 per barrel mark around 4 pm.

Top Nifty Gainers and Losers

Shares of Larsen & Toubro (up 3.56 per cent), Cipla (up 2.30 per cent) and ITC (up 2.18 per cent) ended as the top gainers in the Nifty pack.

On the flip side, shares of Bajaj Finance (down 1.74 per cent), Bajaj Finserv (down 1.37 per cent) and Mahindra and Mahindra (down 1.27 per cent) ended as the top losers in the Nifty pack.

As many as 31 stocks ended in the green in the Nifty index while 18 stocks ended lower.

Top gainers, losers today: Larsen & Toubro, ITC, M&M, Tech Mahindra among most active stocks

Sectoral Indices Today

Realty, PSU bank and FMCG indices clocked strong gains while the consumer durables index ended lower and the auto index ended flat.

Nifty PSU Bank rose 1.50 per cent, followed by Realty (up 1.19 per cent) and FMCG (up 1.05 per cent). Nifty Bank closed with a gain of 0.47 per cent.

Experts’ Views on Markets

“Optimism has inched back today after the last three trading days of consolidation ahead of the FOMC meeting. As the market’s ambiguity against the monetary policy is likely to reverse henceforth, going forward we are unlikely to see another Fed rate hike in 2023. This is because inflation has rapidly come down and is forecast to settle down further. However, the interest rate is expected to stay high in the short-term since the rigidity of core inflation remains above the long-term average,” said Vinod Nair, Head of Research at Geojit Financial Services.

“This bounce shows that bulls are not in the mood to loosen their grip citing major support around the 19,300-19,500 zone. However, any negative surprise from the global front might result in extended consolidation. Meanwhile, traders maintain their focus on sectors showing higher relative strength and preplan their exits as well,” said Ajit Mishra, SVP – Technical Research at Religare Broking.

Technical Views on Markets

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas pointed out that on the daily charts, the Nifty managed to bounce from the Fibonacci support level (19,650) however, the upside got restricted by the hourly upper Bollinger band which was placed around 19,830.

“The daily and the hourly momentum setup is providing divergent signals which can lead to a consolidation in the short term. The daily Bollinger bands are also contracting which points towards a consolidation in the short term. In terms of levels, 19,615 – 19,560 should act as a crucial support zone, and on the upside 19,830 – 19,850 should act as an immediate hurdle zone,” said Gedia.

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Updated: 26 Jul 2023, 04:15 PM IST

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