Value buying lifts stock markets

Mumbai: Benchmark indices bounced back on Wednesday after a two-day decline, with BSE Sensex and NSE Nifty climbing nearly one per cent each, tracking heavy buying in IT and banking stocks amid a positive trend in European markets. At the closing bell, the 30-share BSE benchmark jumped 547.83 points or 0.99 per cent to settle at 55,816.32. During the day, it climbed 584.6 points or 1 per cent to 55,853.09. The broader NSE Nifty advanced 157.95 points or 0.96 per cent to 16,641.80.

"Indian market will react to global trends in-line with FOMC (Federal Open Market Committee) meeting outcome. We are in a rally during the last one-and-a-half months assuming that much is factored in the price. The market has not factored in a recession as valuation continues to trade marginally above the long-term trend. Value buying should be the essence of investment till the risk of a recession subsides," said Vinod Nair, head (research) at Geojit Financial Services.

"Domestic markets regained their positive momentum after taking a two-day pause. Strong results by Index heavyweights like Asian Paints, L&T, Maruti, and Tata Steel boosted investors' confidence," said Siddhartha Khemka, head (retail research), Motilal Oswal Financial Services Ltd.

"Nifty broke a two-day losing streak on July 27 ahead of the US Fed meet outcome in the evening. In the process, Nifty was one of the best performers in the Asian region," said Deepak Jasani, head (retail research), HDFC Securities. "Markets regained the ground as bulls found their way out of the woods ahead of the US FOMC policy decision later. However, a volatile session is expected on Thursday as the street will react to the Fed outcome and July F&O expiry turmoil. Also, commanding attention will also be US Q2 GDP to be released on July 28. The July F&O series expiry on Thursday shall also keep markets volatile," Prashanth Tapse, senior V-P (research), Mehta Equities Ltd.

"Ahead of a critical FOMC meeting, markets have been buoyant in hopes that the process of monetary tightening is drawing to a close. Cooling of raw material prices has helped autos cos and FMCG names, while 1Q results have been quite encouraging thus far," according to S Hariharan, head (sales trading), Emkay Global Financial Services.

"Investors seemed to have priced in a 75 bps rate hike by the US Fed, while recovery in other Asian indices contributed to the overall uptick in markets. However, markets may see bouts of volatility ahead of the monthly F&O expiry tomorrow, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, noted.

Foreign institutional investors (FIIs) remained net sellers as they offloaded shares worth Rs 436.81 crore on Wednesday, as per exchange data.

In the broader market, the BSE midcap gauge jumped 0.90 per cent and smallcap index climbed 0.38 per cent. Among the BSE sectoral indices, healthcare jumped 1.73 per cent, IT (1.34 per cent), basic materials (1.17 per cent), industrials (1.12 per cent), and teck (1.12 per cent). Telecom was the only laggard. Meanwhile, the rupee declined 13 paise to close at 79.91 (provisional) against the US dollar on Wednesday.