United States Federal Reserve Chair Jerome Powell’s categorical statement before a Congressional panel that the central bank would go for interest rate cut later in the current month to prop up the world’s largest economy changed participants’ mood across all Asian markets.
Mr Powell has reportedly told lawmakers that US economy was still under threat and the Fed “would act at an appropriate time.”
In overnight trade in Wall Street broader S&P-500 for the first time hit 3,000-mark on Mr Powell’s statement. Asia markets turned positive in tandem.
In Dalal Street, the 30-share Sensitive Index of Bombay Stock Exchange and 50-scrip Nifty of National Stock Exchange looked steady with upside bias for the first time since previous Friday.
The market traded steady holding on to intra-day gains.
The Sensex ended at 38,823.11 (+266.07) points, 0.69 per cent up as 24 stocks advanced and six declined. NSE Nifty closed at 11,582.90 (+84.00) points, up 0.73 per cent with 40 scrips in green and 10 in red.
Nifty Bank settled at 30,716.58 (+194.45) points a rise of 0.64 per cent.
Gainers among BSE benchmark shares included Hero MotoCo at Rs 2,611, up 4.62 per cent; IndusInd Bank at Rs 1,540.25, up 3.53 per cent and SBI at Rs 363.05, up 2.50 per cent.
IT shares remained under pressure for yet another session after disappointing numbers declared by Tata Consultancy Services.
Regardless of steep multiyear drop in passenger vehicles sales, Nifty Auto intra-day increased 1.5 per cent to a high of 7,630.30 (+119.15) points.
Maruti Suzuki and Mahindra were among the top gainers. Bank shares also staged a comeback apparently on short-covering, according to analysts.
Banks have started transmitting the benefit of Reserve Bank of India’s repo rate cut to their customers.
Analysts see banks’ efforts to boost credit growth in retail segment especially for home buying. Except ICICI Bank other big lenders and HDFC duo were among the top gainers.
As earnings season for Q1 FY2019-20 will enter the second week on Monday, analysts feel markets would be more focused on financials shares.
Apparently, participants appeared taking note of the finance minister Nirmala Sitharaman’s proposal to provide Rs 70,000 crore fresh capital to state-run lenders.
Markets may count on another big positive development that is the monsoon’s steady progress with rainfall gradually spreading across all regions of the country.
Brokerages are also looking beyond monsoon to the festive season but with fingers’ crossed in view of prevailing slowdown in consumption.
Mr Sanjiv Bhasin, IIFL Securities, said on a business website: “We are very bullish with three-month view onwards and we think October onwards we will see the best market rally in a longterm. Use this fall to buy and the pessimism is very much overdone.”
Some brokerages are suggesting mid-cap shares related to infrastructure development since the Budget has allocated Rs 20 lakh crore each year for infrastructure upgradation.
Such a huge provision would boost several infra company shares in midcap segment.