Nifty, Sensex Close At Record Highs As Fed Rate Cut Boosts Risk Appetite: Market Wrap

The NSE Nifty 50 and BSE Sensex ended Thursday at fresh closing highs as risk appetite increased among traders, with the US Federal Open Market Committee guiding for more rate cuts after reducing the key rate for the first time in over four years.

HDFC Bank Ltd. and Kotak Mahindra Bank Ltd. contributed the most to gains in the NSE Nifty 50.

Nifty ended 38.25 points, or 0.15% higher at 25,415.80, and Sensex settled up 236.57 points, or 0.29% at 83,184.80.

The US rate-setting panel cut the benchmark federal fund rate by 50 basis points to 4.75–5.00%, in line with market expectations, which helped the benchmarks post fresh highs at open. Nifty rose 0.92% to a fresh high of 25,611.95, and Sensex rose 1.00% to a fresh high of 83,773.61.

Cheering a 50-bps rate cut by the FOMC, the Indian equities commenced the weekly expiry day on a strong note at a fresh high of 25,500. But, once again, the broader markets dented the market sentiments and a steep fall in the mid- and small-cap stocks dragged the index lower. However, the index managed to hold its gains to end the session at 25,415.80 with gains of 38.25 points, said Aditya Gaggar, director, Progressive Shares Brokers Pvt.

The index has formed a shooting star candlestick pattern at record levels with a probable bearish divergence in the RSI. The consolidation range of the index is 25,300-25,500 and a convincing move on either side will decide the trend, Gaggar said.

Shares of HDFC Bank Ltd., Kotak Mahindra Bank Ltd., NTPC Ltd., Bharti Airtel Ltd., and Reliance Industries Ltd. positively contributed to changes in Nifty.

While those of Larsen & Toubro Ltd., Tata Consultancy Services Ltd., Bharat Petroleum Corp., Coal India Ltd., and HCL Technologies Ltd. weighed the index.

On NSE, seven sectors declined and five sectors advanced out of 12. The NSE Nifty Media declined the most, while the NSE Nifty FMCG rose the most.

Among the sectors, FMCG was the top gainer, followed by the Nifty Bank and Realty, while Media and PSU Banks corrected the most. Mid and Smallcaps corrected to the extent of 0.67% and 1.26% and underperformed the Nifty 50, Gaggar said.

Broader indices underperformed. BSE Midcap closed 0.53% lower and BSE Smallcap was 1.06% down at close.

Of the 20 sectors on BSE, 11 fell and nine ended higher. BSE Oil & Gas fell the most.

Market breadth was skewed in the favour of sellers. Around 2,722 stocks fell, 1,255 rose, and 98 remained unchanged on the BSE.