Reuters
Mumbai
India’s NSE index edged higher yesterday, snapping two days of falls, as oil explorers rose after recent sharp falls, while some firms seen as sensitive to rates extended recent rallies on hopes the central bank would ease policy early next year.
Investors also remained in profit-taking mode for other recent outperformers, including State Bank of India after the NSE index hit a record high on Monday.
Sentiment remains largely positive on hopes for an improving economy and after the Reserve Bank of India said it could cut interest rates early next year depending on inflation.
A business survey showed activity in India’s services sector expanded at its fastest rate in five months in November.
“Market outlook is range-bound for the medium-term. There could be profit-taking in recent outperformers.
We advise clients to be invested, but stick to quality companies as there is a clear lack of near-term triggers,” said Suresh Parmar, head, institutional equities at KJMC Capital Markets.
The benchmark BSE index closed flat at 28,442.71 points, while the broader NSE index ended 0.15% higher at 8,537.65.
Oil explorers were among the leading gainers after Brent crude recovered, although markets remained turbulent as investors search for a price floor after a nearly 40% fall since June.
Oil and Natural Gas Corp closed up 3%, Reliance Industries gained 0.6%, while Cairn India rose 1.4%.
Some interest-rate sensitive shares gained on hopes the RBI could ease monetary policy at its February review. Some analysts believe the RBI could even cut the policy rate by 50 basis points.
Mahindra and Mahindra ended up 1.8%, while ICICI Bank closed up 1.3%.
Defence related stocks rose for the second day after the government notified foreign investment in the sector to up to 49%.
Astra Micro Wave Products closed up 4.8%, adding to the previous session’s gain. Bharat Electronics ended up 4.7%.
Among the decliners, State Bank of India fell 0.2% on profit-taking after gaining 5.2% in the last week ahead of the central bank’s policy.
Pratibha Industries ended 5.8% lower after rating agency Crisil downgraded the stock.
Rupee falls marginally
The rupee ended marginally lower yesterday in line with Asian peers on global dollar strength, but volumes dipped due to a strike by state-run lenders in northern India.
Most emerging Asian currencies skidded lower as the dollar climbed to a seven-year high against the yen, on a more bullish outlook for the world’s largest economy.
All eyes are now on the European Central Bank policy meeting today amid speculation that the eurozone will opt for further quantitative measures to stoke up inflation. Further ahead, the focus will be on US jobs data tomorrow.
“The rupee has so far ignored the weakening in the euro, and if the US employment data tuns out to be strong, then the rupee will start moving in a bigger range,” said Chintan Karnani, chief analyst at Insignia Consultants, a currency risk advisory firm in New Delhi.
The partially convertible rupee closed at 61.9050/9150 per dollar compared with 61.88/89 on Tuesday. State-run bank unions across India are pressing for early wage increases through a 4-day relay strike action, their third nationwide in the last year.
Yesterday’s session was marked by a strike at lenders based in the country’s north. Bank staff in the Western region, including Mumbai, will be off work tomorrow.
In the offshore non-deliverable forwards market, the one-month contract was at 62.15/25.