Reuters

 

Indian shares rose for a second consecutive session yesterday to hit their highest close in five weeks, tracking a rally in global markets on expectations the US Federal Reserve would reaffirm its willingness to wait before raising US interest rates.

Blue-chips such as Tata Motors and Tata Steel led the gainers ahead of the outcome of the Fed’s two-day meeting.

But some of the broader gains were capped ahead of the monthly derivatives contract expiry due today, while companies posting disappointing earnings such as Dr Reddy’s Laboratories fell.

“We have seen strong buying emerging and its still a buy-on-decline market. We expect Nifty to trade above 8,000 levels,” said Suresh Parmar, head, institutional equities at KJMC Capital Markets adding that investors would take a call from the Federal Reserve meeting outcome.

The benchmark BSE index closed 0.81% higher at 27,098.17 points while the broader NSE index gained 0.78% to 8,090.45 points.

Auto stocks led the gains with Mahindra and Mahindra up 1.65% while Tata Motors added 3.5%. The sector was also aided by expectations of higher sales during the ongoing festive season.

Metal stocks rose sharply on the back of firmer prices in international markets. Hindalco Industries gained 6.23% while Tata Steel added 4.54% and Jindal Steel and Power closed up 4.2%.

Technology and consumer stocks also gained. Infosys ended 2.5% higher after having falling 3.9% since October 13. ITC ended 1.23% higher, but is still down 4.2% so far this month.

However, Dr Reddy’s Laboratories closed down 0.81% after its earnings missed some analysts’ expectations.

Shares in Jubilant Life Sciences plunged 11.34% to a two-week low after it net loss widened in the September quarter.

Shares in Oriental Bank of Commerce slumped 4.1% on rising bad loans.

 

Rupee ends slightly weaker

The rupee ended slightly weaker yesterday as caution prevailed ahead of the outcome of the US Federal Reserve’s policy meeting later in the day, although broader sentiment remained positive following continued foreign inflows.

The rupee moved in a tight range for much of the session. The Fed is expected to announce the end of its bond-buying programme but also signal caution about the timing of any hikes in US interest rates.

Some analysts said the Fed’s stance may have already been priced into the rupee’s movement. The rupee has gained around 0.69% so far this month against the dollar after inflows continued into the debt markets despite mild selling in shares.

“FOMC will be dovish, which is already priced into the market, so I expect EM currencies to weaken after the FOMC statement,” said Hemal Doshi, a currency strategist at Geojit Comtrade Ltd

The partially convertible rupee closed at 61.35/36 per dollar, slightly weaker from its close of 61.32/33 on Tuesday.

The rupee had weakened slightly in intraday trade after some banks purchased dollars to meet month-end demand from importers, traders said.