Sensex ends 183 points higher as investors await Fed outcome

Broader markets underperformed indices with BSE Midcap down 0.43% while the Smallcap index fell 0.07%.

Benchmark indices settled the day on a positive note as investors keenly wait for the Federal Reserve’s rate hike decision due Wednesday night.

Sensex rose as much as 194 points during the day led by gains in Tata Motors, Adani Ports, Axis Bank, Wipro, and RIL while Nifty50 reclaimed its 8,200 levels.

S&P BSE Sensex ended the day at 26,697, up 183 points, while the broader Nifty50 settled at 8,222, up 51 points. Broader markets underperformed indices with BSE Midcap down 0.43% while the Smallcap index fell 0.07%.

"Market gained on account of positive European market and short covering ahead of FED policy tomorrow. Investors are eyeing today’s CPI data to ascertain the extent of demonetisations impact in conjunction with RBI’s recent monetary policy stance," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services in a note.

Other developments

Fed is widely expected to raise rates for the first time in 2016 at its two-day meeting that starts later today, with markets pricing in a chance of 0.25 to 0.50% hike. Any aggressive rate hike could hit the market more which is already under pressure over the demonetisation move.

Meanwhile, Asian Development Bank trimmed its 2016 growth estimate for India to 7.0% from 7.4% due to weak investment, agricultural slowdown and the government's recent demonetization. But India's growth forecast for 2017 was kept at 7.8%.

Back home, consumer price index (CPI) number, which is due to come late today is estimated to be at 3.8% for November against 4.2% in October.

Sectors and stocks

Tata Motors rallied as much as 7% to Rs 486 on NSE in early morning trade after a more than 50 million shares of the company changed hands via block deals.

Morgan Stanley reportedly bought the shares (1.73% stake) in Tata Motors on behalf of an undisclosed client on Tuesday. The stock settled the day 3.67% higher and was the top gainer on BSE Sensex.

Energy stocks rose with oil retailer BPCL leading the gains. Bharat Petroleum ended 2.77% higher, after Monday's 3.6% fall due to a jump in crude prices.

Auto sector ended over 1% higher in both the headline indices led by Tata Motors, TVS Motors, Bharat Forge and Motherson Sumi.

Among losers, realty and metals sectoral indices fell the most on BSE Sensex. NALCO, Hindalco, Vendanta and SAIL were the top losers in the metal sector while the realty sector was dragged by India Bulls Real Estate, Sobha and Oberoi Realty.

GAIL was the biggest laggard in BSE Sensex, down almost 1% followed by Lupin, Tata Steel and HUL.

Among other stocks, Vakrangee has dipped 8.5% to Rs 260 on BSE in intra-day trade on back of heavy volumes. The stock fell 9.5% from its record high of Rs 287 touched in early morning trade and settled the day over 6% lower.

Sunteck Realty has surged 15% to Rs 240 on the BSE in intra-day trade after the company reported a consolidated net profit of Rs 96 crore for the quarter ended September 30, 2016 (Q2FY17), due to higher sales and other comprehensive income. The real estate developer had profit of Rs 15 crore in the same quarter last fiscal.

Photograph: Danish Siddiqui/Reuters