Dalal Street opened higher on Wednesday, tracking firm global cues. The benchmark indices gave up their gains as the session progressed. All eyes would be watching the US FOMC meeting outcome, which is expected to be announced later in the day.
The Street is expected to tame the sticky inflation with a hike of 25 basis points, but uncertainty in the banking sector is also weighing on the sentiments. The unseasonal rains this week have caused large-scale crop damage across large swathes of India.
At 9.20 am, the 30 share pack of BSE Sensex was trading 260.78 points, or 0.45 per cent, higher at 58,335. 46, while the Nifty 50 of the NSE went up 96.90 points, or 0.57 per cent, to 17,204. Broader markets increased in parallel with headline peers as BSE midcap and smallcap indices added half a per cent, each. India VIX was calmed over 2 per cent to 14.71 level, according to the fear gauge.
The index started the session on a positive note and traded in the 100 points range amid stock-specific action. The daily price action formed a bull candle with a higher high-low. The index has anchored ongoing corrective moves around the lower band of the falling channel, despite oversold conditions, said ICICIDirect Research.
An immediate obstacle of 17,200 would be the key to a meaningful pullback towards 17,600 by the end of March 2023, as its confluence of 200 days EMA coincided with last week's high. It said traders should not create aggressive short positions.
Despite the Nifty Media index, all other sectoral indexes were trading in green during the early hours of Wednesday. The IT and Metal index jumped about a per cent. They were followed by Nifty Auto, Realty and PSU Bank indices.
In the Nifty 50 pack, HDFC Life and SBI Life topped among the gainers, rising 3 per cent, each, followed by Tata Consumer Products, which gained 2 per cent. UPLand Larsen Toubro, Tata Motors, Hindalco and HCL Tech added more than a per cent each.
Bharat Petroleum Corporation and Coal India plunged about a per cent each on the downside. Power Grid, Asian Paints, NPTC and Cipla were also among the top losers among the blue-chip counters.
Today's decision of the Fed will determine the direction of the market. The most likely outcome will be a 25 bp hike in rates along with assurances of financial stability. Since inflation continues to be high and unemployment is at record lows, the Fed has to keep its vigil on price stability, said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
He said there was no fear in the market, unlike during the 2008 Global Financial Crisis. The investors should be cautious and wait for stability to emerge. Long-term investors can nibble at high quality large caps. VST Tillers Tractors rallied 16 per cent ahead of the Monsoon season in the broader markets. Ashiana Housing gained more than 15 per cent after the company announced its annual booking hit Rs 1,278. There were 84 crore as of March 20, 2023. After the announcement of a fourth interim dividend, Hindustan Zinc jumped by 5 per cent.
Sobha's Realty company declined by 5 per cent as the company was informed of a search carried out by the Income Tax Department in office and other premises. CSB Bank and Aarti Drugs were among the losers, as both stocks fell up to 4 per cent, each.