Indian equities closed higher on Thursday led by gains in banking, auto and metal stocks. The rally, in its second day today, followed advances in global equities after the US Federal Reserve maintained status quo on key policy rates and signalled no rate change through 2020.
The benchmark Sensex closed 0.42% higher at 40581.71 points, while Nifty gained 0.52% to end at 11971.80 points.
In the US, Dow Jones and S&P rose 0.1% and 0.3% respectively, while in Asia, Nikkei and Hang Seng gained 0.1% and 1.3%. In Europe, the FTSE 100, CAC 40 and Dax gained nearly 0.5% each.
Investors now await India’s consumer price index-based inflation and factory output data for further cues. India’s retail inflation is likely to have risen to 5.22% year-on-year in November compared with a 4.62% rise in October. Industrial production is likely to have contracted 4.8% in October compared with a 4.3% contraction in September, according to a Bloomberg survey.
Investors viewed US Fed Chairman Jerome Powell’s remarks as dovish as the central bank signalled it would hold rates through 2020 amid a solid economy. Among US equity indices, Dow Jones and S&P 500 gained 0.1% and 0.3%, respectively. In Asia, Nikkei and Hang Seng rose 0.2% and 1.3%, respectively.
“The Fed’s policy decision was in line with market expectations. However, the central bank removed an earlier reference to “uncertainties" and said that it will continue to monitor the implications of data for the economic outlook “including global developments and muted inflation pressures. This has eased the recessionary fears despite the prolonged US-China trade war, and has led to a surge in risk appetite", said Rahul Gupta, head of research - currency, Emkay Global Financial Services.
Banking stocks gained after the Union Cabinet on Wednesday approved an amendment to the Insolvency and Bankruptcy Code (IBC) that prohibits attaching assets of companies resolved under the mechanism for offences committed by the previous management or promoters. Yes Bank surged 5.7%, RBL Bank 3%, State Bank of India 2.9%, Kotak Mahindra Bank 1.8%, Indusind Bank 1.6%, HDFC Bank 1.4%, Federal Bank 1.2%, Axis Bank 0.6%.
Among auto stocks, Tata Motors Ltd gained 7.2%, Ashok Lelyand 2.3%, Hero MotoCorp 1.6%, Eicher Motors 1.6%, TVS Motors 1.4%. In Metal stocks, Vedanta Ltd 3.7%, SAIL 3.4%, Tata Steel 3.1%, JSW Steel 2.3%, Hindalco Industries Ltd 2.2%.
Infosys Ltd fell 2.6% after Reuters reported that The Schall Law Firm, a national shareholder rights litigation firm, has announced the filing of a class action lawsuit against the company.
Tata Consultancy Services Ltd fell 2% after a huge block deal. Around 1.95 million shares of the company changed hands in multiple block deals, CNBC TV reported. However, details of buyers and sellers were not immediately available.