With rate cut expectations running high ahead of RBI meet this week, risk appetite improved especially in rate sensitive stocks
Benchmark indices pared all losses to settle on a higher note in today’s session after two sessions of fall ahead of RBI policy meet. Polls suggesting RBI may cut the rate by 25 bps affected the sentiment.
Globally, the sentiment was affected after Italian PM Matteo Renzi resigned following heavy defeat on constitutional referendum, raising political uncertainty in the euro zone.
Swinging between gains and losses, Sensex fell as much as 105 points at intra-day and rose 160 points in the afternoon trade led by gains in telecom, auto and metal sector indices. While broader Nifty50 fell to a intra-day low of 8,056 but later pared losses to reach a high of 8,142 level.
The S&P BSE Sensex settled at 26,349, up 118 points, while the broader Nifty50 ended at 8,129, up 42 points. Among broader markets, BSE Midcap was up 0.66% while BSE Smallcap gained 0.26%.
"With rate cut expectations running high ahead of RBI meet this week, risk appetite improved especially in rate sensitive stocks forcing short covering. Sentiments were also helped by European markets swing higher after Italian referendum. Expectations of populist measures aimed at softening demonetisation worries are also allowing markets to be forward looking now," said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services.
Stocks and sectors
Financial stocks pared losses after falling almost 2% at intra-day but settled in green. Housing Development Finance Corp Ltd shed up to 4.34% but ended 1.87% down. The stock was the biggest loser on BSE Sensex.
Other losers included TCS (1.45%), GAIL (0.89%) and Sun Pharma (0.78%).
The Nifty IT index dropped 0.89% and ended lower for a third straight session. MindTree and Tech Mahindra led the losses, with a fall of more than 2% each.
Meanwhile, auto sector index was the top sectoral gainer in both the headline indices. MRF (3.76%) and Ashok Leyland (3.55%) led the gains on BSE Sensex while M&M (3.42%), Maruti (2.72%), Tata Motors (1.28%) and Bajaj Auto (1.98%) also pulled the index.
Other gainers at BSE Sensex included Asian Paints (3.36%), Lupin (3.18%), Bharti Airtel (2.65%) and Tata Steel (1.82%).
Among other stocks, Crompton Greaves settled 8.94% lower at Rs 69.30 on the BSE on back of heavy volumes after the company said that it has agreed to extend the Long Stop Date of the Share Purchase Agreement (SPA) with Pauwels Spaco to December 6, 2016. The stock hit an intra-day low of Rs 68.50 on the BSE.
Procter and Gamble Hygiene and HealthCare Ltd (P&G) ended 2.40% higher at Rs 6,775 on the BSE after the company reported a 50% year on year (YoY) jump in net profit at Rs 103.72 crore for the quarter ended September 30, 2016 (Q1), helped by higher volume growth. The stock reported intra-day high of Rs 6,899.
Photograph: Shailesh Andrade/Reuters