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Sensex crosses 40,000-mark again, Nifty nearing 11,850 on foreign fund inflows; Airtel, Infosys, ITC gain over 2%

FP Staff

The Sensex crossed the 40,000 mark on the BSE today and is at 40,102 points, a riseof 270 points or 0.68 percent at 12.20 PM.

The 30-share index pared some gains to trade 210.61 points or 0.53 percent AM on foreign fund inflows and hopes of tax sops for equity investors.

The Nifty rose 70 points up to 11860 or 0.63 percent.

The Nifty is a mere 300 points away from a record high, said media reports.

At 10:15 AM, the BSE Sensex was up by 126 points at 39,956 while the Nifty 50 edged higher by 33 points to 11,820. Sectoral indices at the National Stock Exchange were mixed with Nifty IT up by 1.1 percent but auto, pharma and private banks in the red.

After reclaiming the 40,000 mark, the 30-share index pared some gains to trade 128.48 points, or 0.32 percent, higher at 39,960.32, and the broader NSE Nifty advanced 35.85 points, or 0.30 percent, to 11,822.70.

In early trade on Wednesday, the Sensex jumped over 250 points driven by foreign fund inflow and hopes of tax sops for equity investors.

Top gainers in the Sensex pack included Bharti Airtel, L&T, Infosys, ITC, Vedanta, HDFC Bank, Bajaj Auto, Kotak Bank and Sun Pharma rose up to 2 percent.

Shares of Vodafone Idea rose by 2.8 percent, Bharti Airtel by 2.1 percent and Bharti Infratel by 2.7 percent after sources said that the Committee of Secretaries headed by Cabinet Secretary Rajiv Gauba has been asked to evaluate financial stress faced by telecom operators and suggest measures to alleviate the stress, a PTI report said.

Oil marketing firms Indian Oil Corporation and Bharat Petroleum Corporation edged higher by 2.6 percent and 1.8 percent respectively after Prime Minister Narendra Modi said a day earlier that India will invest $100 billion in oil and gas infrastructure to meet energy needs of an economy that is being targeted to nearly double in five years.

On the other hand, Tata Motors, Yes Bank, IndusInd Bank, Tata Steel, ICICI Bank and TCS fell up to 3 percent.

In the previous session, the 30-share Sensex ended 581.64 points, or 1.48 percent, higher at 39,831.84. Likewise, the Nifty rallied 159.70 points, or 1.37 percent, to close at 11,786.85.

Foreign institutional investors were net buyers in the capital market, purchasing Rs 876.64 crore on Tuesday, while domestic institutional investors too bought shares worth Rs 144.75 crore, data available with stock exchange showed.

"Markets from here on will be more stable on expectations of good December quarter earnings," said Siddharth Sedani, head of equity advisory at Anand Rathi Financial Services Ltd in Mumbai.

According to Sandeep Nayak, ED and CEO of Centrum Broking, a proposed review of key taxes such as long term capital gains (LTCG), securities transaction tax (STT) and dividend distribution tax (DTT) before the budget has added impetus to domestic investor sentiment.

However, gains were capped as investors also took cues from weakness in other Asian equities amid reports of a possible delay in the US-China trade deal, traders said.

The market is also awaiting cues from US Federal Reserve's policy decision, scheduled to be announced later in the day.

Rupee depreciates

The rupee, meanwhile, depreciated 11 paise against the US dollar to trade at 70.95 in early session as investors were cautious ahead of the US Federal Reserve's interest rate decision.

Besides, a strengthening greenback against other overseas currencies also kept investors on the edge, forex dealers said.

However, a positive opening in domestic equity market and easing crude oil prices supported the rupee and restricted the fall, they added.

At the interbank foreign exchange, the rupee opened weak at 70.92, then fell further to 70.95 against the American currency, down 11 paise over its previous closing price.

On Tuesday, the rupee had settled at 70.84 against the US dollar.

The US Federal Reserve is expected to announce its policy rate decision on Wednesday.

According to experts, the Fed is likely to approve its third interest rate cut in a row this year.

Brent futures, the global oil benchmark, slipped 0.88 percent to $61.05 per barrel.

Asian shares slip

Asian share markets slipped on Wednesday, as the prospect of a rate cut by the Federal Reserve was countered by worries a Sino-US first-stage trade deal could be delayed.

MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.33 percent from Tuesday's three-month high while Japan's Nikkei lost 0.35 percent after hitting a one-year high the previous day.

On Wall Street overnight, the S&P 500 index touched a record intraday high, led by strong earnings from drug manufacturers such as Merck (MRK.N) and Pfizer, before ending down 0.08 percent.

Markets had erased gains after Reuters reported a US administration official said an interim trade agreement between Washington and Beijing might not be completed in time for signing in Chile next month as expected.

A disappointing profit report from Google parent Alphabet kept the technology-rich Nasdaq in the red, with the Nasdaq Composite falling 0.59 percent.

MSCI's gauge of stocks across the globe slipped 0.06 percent in Asia on Wednesday from a 21-month high reached on Tuesday.

Since US President Donald Trump outlined what he called the first phase of a trade deal with China earlier this month, investors have bet on a trade truce between the two countries, driving global equities higher.

Expectations of further US monetary policy loosening also emboldened investors, with a reduction of 0.25 percentage point later in the day almost seen as a done deal.

"With a cut today completely priced in, markets are looking to the Fed's stance on its policy outlook," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management, Reuters said.

While Fed funds rate futures fully price in a 25-basis-point cut on Wednesday, only about a 30 percent chance of another cut in December has been priced in, compared with about 70 percent earlier this month.

"I think the Fed will clearly indicate that a rate cut in December is not its main scenario," said Tomoaki Shishido, macro strategist at Nomura Securities.

Fading expectations of aggressive rate cuts by the Fed have lifted the two-year US bond yield to 1.644 percent, compared with a two-year low of 1.368 percent in early October.

The 10-year US Treasuries yield stood at 1.833 percent, near a 1-1/2-month high of 1.860 percent touched earlier this week.

That has helped to lift the dollar against the yen. The dollar was traded at 108.86 yen, after having hit a three-month high of 109.07 yen

The euro stood at $1.1107, having bounced off from Tuesday's low of $1.10735.

Sterling wobbled after Britain decided to hold an election on 12 December following Prime Minister Boris Johnson winning approval from parliament for an early ballot aimed at breaking the Brexit deadlock.

While Johnson seeks to gain a parliamentary majority to ratify his Brexit deal, the election would be highly unpredictable as Brexit has fatigued and enraged swathes of voters, while eroding traditional loyalties to the two major parties, Conservative and Labour.

The currency last traded at $1.2861 GBP=D4.

--With agency inputs

Also See: Sensex closes marginally higher, Nifty ends flat; Yes Bank, SBI, ICICI among top gainers

Sensex surges over 600 points in afternoon trade amid fresh tax cut hopes; Tata Motors gains 13%, Yes Bank jumps 8%

Markets open on positive note: Sensex advances over 150 points, Nifty up; energy, banking stocks early gainers

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