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Sensex rallies over 400 points, Nifty crosses 12,200-mark in morning session ahead of IIP, inflation data releases; Rupee up 7 paise

FP Staff

Sensex rallied over 300 points in the opening session on Wednesday driven by gains in HDFC twins, RIL, ICICI Bank and HUL ahead of the release of inflation and factory output data. It rallied gains at 10.25 AM over 400 points at 419.95 or 1.02 percent at 41636.09.

The Nifty was up 111.35 points up or 0.92 percent at 12,219.25.

In the opening session, FMCG shares were trading high.

The 30-share BSE index was trading 331.04 points or 0.80 percent higher at 41,547.18, and the broader NSE advanced 93.50 points, or 0.77 percent, to 12,201.40.

In the previous session, Sensex settled 236.52 points, or 0.58 percent, higher at 41,216.14 and Nifty rose 76.40 points, or 0.64 percent, to 12,107.90.

Meanwhile, on a net basis, foreign institutional investors sold equities worth Rs 209.39 crore, while domestic institutional investors bought shares worth Rs 344.63 crore on Tuesday, data available with stock exchanges showed, according to a PTI report.

HUL was the top gainer in the Sensex pack, rising up to 3 percent, followed by Tata Steel, NTPC, HDFC, Nestle India, PowerGrid and Axis Bank.

On the other hand, IndusInd Bank was the sole laggard in the morning session.

According to analysts, domestic investors are likely to stay focused on the last batch of Q3 numbers, factory output and CPI inflation for the month of January. As per the consensus, inflation is expected to remain elevated confirming the recent action by the central bank.

The market also took positive cues from global markets that remained on firm footing despite concerns over coronavirus (COVID-19), traders said.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul were trading on a positive note.

Stock exchanges on Wall Street closed with gains on Tuesday.

Rupee rises 7 paise to 71.21 against US dollar in early trade

The rupee appreciated by 7 paise to 71.21 against the US dollar in opening trade on Wednesday, driven by positive opening in domestic equities, a PTI report said.

Forex traders said positive opening in domestic equities supported the local unit, while rising crude prices, foreign fund outflows and strengthening of the American currency weighed on rupee and restricted its upmove.

Moreover, the rupee continued to consolidate in a narrow range ahead of inflation and industrial production figures scheduled to be released later in the day, they added.

The rupee opened strong at 71.24 at the interbank forex market then gained further ground to touch 71.21 per dollar, displaying gains of 7 paise against the greenback.

On Tuesday, the rupee had settled at 71.28 against the US dollar.

The benchmark BSE Sensex was trading with gains of 370.21 points, or 0.90 percent to quote at 41,586.35 while the NSE Nifty was trading at 12,205.30, up 97.40 points, or 0.08 per cent.

Foreign institutional investors sold equities worth Rs 209.39 crore on a net basis on Tuesday, according to provisional exchange data.

Meanwhile, Brent crude, the global benchmark, was trading at USD 54.97 per barrel higher by 1.78 percent.

The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.04 percent to 98.75.

The 10-year government bond yield was at 6.48 percent in morning trade.

Stocks inch higher as new coronavirus cases fall

Asian shares and Wall Street futures nudged higher on Wednesday amid hopes the worst of the coronavirus in China may have passed, although prevailing uncertainty about the outbreak has kept investors wary.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.31 percent.

Chinese shares fell 0.12 percent, but investors in other equity markets looked past this decline. Shares in Hong Kong .HIS rose 0.57 percent to a three-week high.

Australian shares were up 0.52 percent, while Japan's Nikkei stock index rose 0.6 percent.

Oil futures, which have been in a downtrend since the start of the year, rose in Asia from 13-month lows due to budding optimism about the virus and hopes that output cuts by major producers will support prices.

The yuan was little changed in onshore trade and safe-havens such as Treasuries, the yen and the Swiss franc were marginally weaker in a sign of slowly improving sentiment.

The global mood brightened after China's senior medical adviser said on Tuesday the number of new coronavirus cases was falling in some provinces and forecast the epidemic would peak this month.

The number of new cases in Hubei, the province at the epicentre of the outbreak, was 1,068 as of Tuesday, down from a peak of over 3,000 new cases on Feb. 4, and the lowest number of new infections since 31 January.

Investors will likely need to see more evidence that the virus, which emerged in the central Chinese city of Wuhan late last year and has spread to 24 other countries and territories, is indeed receding before they take on more risk.

Concerns that the virus will slow factory activity and consumer spending in the world's second-largest economy have roiled global stocks and commodities, and many of these markets are still trying to regain their footing.

"Evidence suggests the positive mood will continue, and we see some coordination in markets with oil rallying, base metals up and Treasuries coming under pressure," said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

"It does appear there is increasing comfort that the virus won't impact growth in a significant way, but I am not ready to buy risk assets yet."

US stock futures rose 0.02% in Asia on Wednesday. The S&P 500 and the tech-heavy Nasdaq inched to their second consecutive closing high on Tuesday.

Benchmark 10-year Treasury notes fell further in Asia, pushing yields up to 1.6144 percent.

Treasury prices declined on Tuesday after US Federal Reserve Chair Jerome Powell said the US economy is resilient.

Powell also said he is closely monitoring the coronavirus in China, because it could lead to disruptions that affect the global economy.

Chinese firms and factories are struggling to get back to work after the extended Lunar New Year holiday. Some companies say they need loans and are laying off workers as supply chains for global firms from car manufacturers to smartphone makers ruptured.

China's foremost medical adviser on the outbreak, Zhong Nanshan, told Reuters numbers of new cases were falling in some provinces and forecast the epidemic would peak this month, although investors remained sceptical.

Stocks in New Zealand rose to a record high and then pared gains. The local dollar rose 0.9 percent to $0.6462 for its biggest daily gain since December after the country's central bank dropped a reference to the chance of further cuts, suggesting its easing cycle might be over.

In the commodities market, U.S. crude futures rose 0.88 percent to $50.38 a barrel, while Brent crude rose 1.33 percent to $54.83 per barrel on hopes that Chinese demand for oil will pick up once the flu-like virus is contained.

Saudi Arabia wants global oil producers to agree a quick supply cut in response to the coronavirus, sources familiar with the kingdom's thinking have told Reuters, which is another supportive factor for crude futures.

In the onshore market, the yuan held steady at 6.9685 per dollar.

The yen traded at 109.87 versus the greenback, on course for its third day of decline, while the Swiss franc held steady at 0.9751 against the dollar.

--With inputs from agencies

Also See: Sensex rallies 350 points, Nifty reclaims 12,200-mark amid positive trend in global equities; HUL, ICICI Bank among top gainers

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