Crude oil prices fell over 6%. (Photo: PTI)
Crude oil prices fell over 6%. (Photo: PTI)

Equities pare gains but close higher; OMCs, cigarette makers in focus

  • Investors will await the outcome of the US Federal Reserve’s policy meeting due later today
  • The Sensex rose 0.23%, or 82.79 points, to close at 36563.88, while Nifty 50 gained 0.21% to end at 10840.65

Mumbai: Indian equities erased half of the day’s gains to close marginally higher on Wednesday as investors exercised caution ahead of the outcome of US Fed meeting due later today.

The benchmark equity index Sensex rose 0.23% or 82.79 points to close at 36563.88, while Nifty 50 gained 0.21% to end at 10840.65 points.

Investors now await the outcome of the US Federal Reserve’s policy meeting due later today. The central bank is poised to cut interest rates for the second time this year as policymakers try to get ahead of economic risks emanating from a global slowdown and US President Donald Trump’s trade war.

"The correction in crude oil prices has definitely provided respite to investors. Nonetheless, geo-political developments would still be one of the key factors on investors’ radar as any further escalation would have an adverse impact on markets and economy", said Ajit Mishra, vice-president research at Religare Broking.

"Apart from this, the FOMC meet outcome tonight would be a key factor as there is a wide expectation of a rate cut. However, commentary on growth and rate outlook would be a crucial. On the domestic front, the recommendations of GST Fitment committee to not reduce rates in certain sectors has impacted sentiments, however the final decision would be taken at the GST Council meet on September 20th", Mishra added.

Earlier in the day, markets had risen nearly 0.6% as global crude oil prices fell more than 6% after Saudi energy minister Prince Abdulaziz bin Salman in a press conference on Tuesday said the country’s oil production capacities were fully restored and output will be back to pre-attack levels by the end of September.

Shares of oil marketing companies rallied after a fall in crude prices. Hindustan Petroleum Corp Ltd rose 3.6%, Bharat Petroleum Corp Ltd was 3.7% higher, and Indian Oil Corp Ltd advanced 2.7%.

Over the last two days, crude had surged nearly 14% after a series of attacks on Saudi’s oil facilities over the weekend disrupted the kingdom’s crude production. This had stoked concerns over fiscal slippage and higher inflation in India.

Back home, shares of cigarette makers surged today after the Union Cabinet banned e-cigarettes. Shares of ITC Ltd rose 1.03%, while those of Godfrey Phillips India Ltd soared 5.5%, VST Industries Ltd gained 3.4% and Golden Tobacco Ltd climbed 4.7%.

Shares of Bajaj Finance Ltd gained 1.5% after the company said it will raise up to 8,500 crore through qualified institutional placement (QIP).