Stock market today: Nifty 50, Sensex end higher for 4th session in a row; Fed outcome eyed after BoJ hikes rates

Stock market today: The Indian stock market benchmarks—the Sensex and the Nifty 50—closed higher for the fourth consecutive session on Wednesday, July 31, tracking positive global cues after the Bank of Japan (BoJ) raised interest rates.

The BoJ surprised markets on Wednesday when it hiked interest rates and announced a detailed plan to slow its bond-buying. This move of BoJ is a step toward gradually phasing out a decade of massive stimulus.

“The decision, which defied dominant market expectations for the BoJ to stand pat on rates, takes its short-term policy rate to levels unseen since 2008,” reported Reuters.

After the BoJ surprise, all eyes are on the US Fed policy outcome, which is due later today. The Fed is widely expected to keep rates unchanged on Wednesday, but market participants hope there will be hints for the start of the rate reduction cycle in September.

Positive global cues underpinned domestic market sentiment, which has been on a record-setting run lately despite elevated valuations. Major European markets were over a per cent higher when the Sensex closed.

The Sensex closed with a decent gain of 286 points, or 0.35 per cent, at 81,741.34, while the Nifty 50 settled 94 points, or 0.38 per cent, higher at 24,951.15.

The BSE Midcap index outperformed the Sensex, jumping 0.86 per cent. However, the Smallcap index witnessed profit booking and slipped 0.14 per cent, snapping its winning run of the last three consecutive sessions.

"Positive global sentiment, driven by expectations of an easing interest rate cycle by the Fed and RBI in the medium term owing to benign inflation, ignited the rally today. The BoJ raised its interest rate while all eyes were on US Fed policy. The weakening dollar shows signs of a rate cut in September," said Vinod Nair, Head of Research, Geojit Financial Services.

The 30-share pack Sensex saw 20 stocks end in the green. Shares of JSW Steel, Asian Paints, and Maruti ended as the top gainers in the index. On the flip side, shares of Reliance Industries, Tata Motors, and Infosys ended as the top losers in the index.

Maruti, NTPC, Sun Pharma, Tech Mahindra, Ashok Leyland, GAIL, Lupin, Persistent Systems, Trent, and TVS Motor were among the 361 stocks that hit fresh 52-week highs in intraday trade on the BSE.

The overall market capitalisation of the firms listed on the BSE rose to nearly ₹462.5 lakh crore from nearly ₹461 lakh crore in the previous session.

Most stocks (34 stocks precisely) ended in the green in the Nifty 50 index. Maruti, JSW Steel, and HDFC Life were the top gainers, while Britannia, Dr Reddy's Labs, and Apollo Hospitals were the top losers.

Among the sectoral indices, barring Nifty PSU Bank (down 0.43 per cent), Realty (down 0.37 per cent), and Nifty Oil & Gas (down 0.04 per cent), closed higher.

Among the gainers, Nifty Metal (up 1.22 per cent), Pharma (up 1.10 per cent) and Media (up 1.07 per cent) gained significantly.

Nifty Bank rose 0.11 per cent, while the Private Bank index climbed 0.15 per cent.

The Nifty 50 has been attempting to surpass the 25,000 mark but elevated valuations and a lack of fresh triggers are challenging the gains.

According to Jatin Gedia, a technical research analyst at Sharekhan by BNP Paribas, the hourly momentum indicator has reached the equilibrium line, indicating that the consolidation is complete and the Nifty 50 is now poised for a breakout.

"Short-term target for the Nifty 50 is placed at 25,350–25,530, and crucial support is placed at 24,750 – 24,700," said Gedia.

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