rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Markets end stronger ahead of the Fed meet; oil stocks shine

Markets end stronger ahead of the Fed meet; oil stocks shine

Last updated on: December 16, 2015 16:55 IST

The oil & gas stocks surged on the back of recovery in the crude oil prices as it bounced back from the multi-year lows.

Markets extended gains for the third straight session led by financials and information technology majors even as investors keenly await outcome of the US Federal Reserve two-day meet which ends later today.

The S&P BSE Sensex ended at 25,495, up by 174 points and the Nifty50 settled at 7,750, up by 50 points.

The two day FOMC meet of the US Federal Reserve will conclude today in which the Fed Chair Janet Yellen is widely expected to announce hike in interest rates for the first time in almost a decade.

According to Jimeet Modi, CEO, SAMCO securities, "US FED is most likely to increase the benchmark interest rates in its meeting after keeping such near zero rates for years post the financial crises of 2008-2009. Historically there is no evidence across the world that after every rise in interest rate markets fall and vice versa.

There are times when interest rates have fallen and still markets have fallen too.

As such there is only brouhaha created around such events. Indian markets have fallen hard since March of this year and it is time for a bounce. Interest rate hikes as and when come will be calibrated and measured such that the financial markets integrity is maintained."

He further said, "There is nothing to fear, our markets are ripe for a rise and will do so subject to short term knee jerk reaction."

In another major development for the day, the Supreme Court of India has banned the registration of all new diesel cars with over 2000 cc capacity in Delhi-NCR till March 31st, 2016. As a step to curb pollution in the capital city, the apex court has also ordered that the taxis in Delhi be converted to CNG by March 31, 2016.

Following the order, the shares of CNG manufacturers are trading higher.

Everest Kanto Cylinder has surged 16% on the BSE while Nitin Fire Protection Industries has climbed 1% Gas distribution companies are also seen as the key beneficiaries of the Supreme Court order. Gujarat Gas (6% ), Indraprashta Gas ( 7%), Gail (1.3%) have all surged on the BSE.

Meanwhile, while speaking at the Rajya Sabha, Finance Minister Arun Jaitley said the government will achieve its fiscal deficit target without any cuts in the government spending. On the macro-economic front, India’s merchandise exports fell for the twelfth consecutive month in November this year.

KEY STOCKS

The oil & gas stocks surged on the back of recovery in the crude oil prices as it bounced back from the multi-year lows.

Cairn India,ONGC, Reliance Industries gained between 0.2-4.2% each. Shares of TCS climbed 1.3% after the company announced that it has been selected by leading global aviation group Deutsche Lufthansa AG to provide testing services and help improve the quality of services of their technology operations.

HDFC Bank advanced 1% after the bank issued and allotted on a private placement basis senior, unsecured, redeemable, long term, non-convertible bonds in the nature of debentures.

BHEL jumped 1.1% after the company announced that it has commissioned 500MW thermal power unit in the state of West Bengal.

Following the Supreme Court order of banning new diesel luxury cars and sport utility vehicles (SUVs) with engines beyond 2,000 cc from hitting Delhi roads, asserting it would not permit the rich to buy such vehicles that polluted the air and affected public health, M&M skid over 5%. Wipro was another loser in a firm market.

It slipped 0.5% after the company issued a warning saying that disruption of works at its Chennai facilities due to recent floods would impact third quarter (October-December 2015) performance. Among other shares, Nestle India dropped 0.1% after the Supreme Court has ordered fresh testing of Nestle India's Maggi noodle samples at Mysore lab.

GLOBAL MARKETS

Shares and bond markets rose and the dollar dipped on Wednesday, as investors readied for what is expected to be the first rise in U.S. interest rates in almost a decade.

Asian shares finished higher ahead of US Fed meet outcome. Japan's Nikkei .N225 surged 2.5 percent, rebounding from a two-month low struck the day before as risk sentiment has blown hot and cold ahead of one of the most-anticipated market events this year.

European shares opened broadly flat to consolidate sharp gains made on Tuesday and as new data bolstered signs of a gradual pick-up in bloc's confidence.

Purva Chtnis
Source: