Sensex gains ahead of Fed outcome; RCom leads

The BSE Sensex edged up on Wednesday amid volatility as investors awaited the outcome of the U.S. Federal Reserve meeting, with telecom stocks such as Idea Cellular gaining on new roaming regulations. Major markets, including Asia, were stuck within recent ranges as investors keenly awaited comments from Fed Chairman Ben Bernanke whether the U.S. central bank will scale back its bond-buying programme. Traders worry an end to U.S. monetary stimulus could lead to portfolio outflows, pushing the rupee lower and, in turn, delaying any rate cuts from the Reserve Bank of India. Foreign institutional investors (FIIs) have been sellers of Indian shares for six consecutive sessions, totalling Rs 3,431 crore as per exchange and regulatory data. "Even if the Fed wants to withdraw stimulus it would be gradual and this doesn't mean all money would go out of the system," said Deven Choksey, managing director at K R Choksey Securities. Apart from the Fed's decision, the RBI and the rupee's moves are really important, added Choksey. The benchmark BSE index rose 0.12 per cent, or 22.42 points, to 19,245.70. The broader NSE index gained 0.15 per cent, or 8.65 points, to 5,822.25, closing above the psychologically important 5,800 level. Telecom shares gained for a second day as the new national roaming regulations were seen as less stringent than expected, with a negligible financial impact, dealers said. Idea Cellular rose 4.7 per cent, while Bharti Airtel ended 2.6 per cent higher and Reliance Communications gained 2 per cent. FIIs bought Rs 562 crore worth of stock futures on Tuesday, NSE data showed. Derivatives analysts said buying was mainly concentrated on Reliance Communication Ltd's futures. IDFC gained 1 per cent, while Religare Enterprises rose 0.2 per cent after both companies took steps to apply for banking licences, continuing their quest to diversify their businesses. Among other likely banking licence candidates, Mahindra and Mahindra Financial Services ended 4.3 per cent higher, dealers said. However, banks fell on fears that an end to the Fed monetary stimulus could push the rupee lower, delaying any rate cuts from the central bank. Axis Bank fell 0.1 per cent, while ICICI Bank ended 0.4 per cent lower. Copyright Thomson Reuters 2013

Sensex gains ahead of Fed outcome; RCom leads

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