Stock markets rise for 4th day; metal, power shares gain ahead of key Fed policy decision

Benchmark BSE Sensex rose by nearly 286 points to close at a record high while Nifty settled above 24,950 level on Wednesday, extending their winning run to the fourth day on gains in metal, power and select auto shares.

The 30-share BSE Sensex settled higher by 285.94 points or 0.35% at 81,741.34, its all-time closing high, with 20 of its components advancing and 10 ending lower. The index opened higher and jumped 372.64 points or 0.45% to hit an intra-day high of 81,828.04.

The NSE Nifty rose 93.85 points or 0.38% to close at an all-time high of 24,951.15. During the day, it surged 127.3 points or 0.51% to hit a high of 24,969.35.

This graph shows how the Nifty performed on July 31, 2024.
| Photo Credit:
PTI

“The domestic market is attempting to cross above the psychological threshold of 25,000, as subdued Q1FY25 earnings and stretched valuations are curbing the challenge, while positive global trends and sector rotation are supporting the traction,” Vinod Nair, Head of Research, Geojit Financial Services said. Positive global sentiment driven by expectations of an easing interest rate cycle by the U.S. Fed and the RBI in the medium term, owing to benign inflation, ignited the rally, he added.

The market capitalisation of BSE-listed companies jumped to a life-time peak of ₹462.38 lakh crore ($5.52 trillion) on July 31 helped by a four-day rally in benchmark indices, making investors richer by ₹5.45 lakh crore.

Top gainers

Among the Sensex stocks, JSW Steel, Asian Paints, Maruti Suzuki India, NTPC, Adani Ports and Special Economic Zone, Bharti Airtel, ITC and Tech Mahindra were the major gainers.

Maruti Suzuki rose by 2.28% as the auto major reported a 47% jump in its net profit for the June quarter. Reliance Industries, Tata Motors, Infosys, Mahindra and Mahindra, Bajaj Finance and Axis Bank were the laggards.

At the market close, the BSE smallcap gauge fell 0.14% in the broader market. However, BSE MidCap gauge jumped 0.86%. During the day, both the indices hit their all-time high level. Among the indices, Utilities surged (1.57%), followed by Power (1.46%), Metal (1.12%), Healthcare (0.91%) and Commodities (0.74%). Energy, Telecommunication and Realty were the laggards.

In the broader market, Torrent Power shares zoomed nearly 17% to finish at ₹1,867.10 per piece on the BSE. Also, Omaxe shares fell 5% on the BSE after SEBI barred the real estate firm, its Chairman Rohtas Goel, MD Mohit Goel and three others from the securities market for two years for irregularities in the company’s financial statements.

Prashanth Tapse, Senior VP (Research) at Mehta Equities, said Nifty ended comfortably in the green ahead of the FOMC outcome, closing just shy of the psychological 25,000 mark, signifying the bulls’ continued strength on Dalal Street. Investors now await key data releases and the FOMC outcome, with expectations set on Jerome Powell’s commentary, he said.

U.S. Fed to announce its policy stance later today

As expected, the Bank of Japan raised its interest rate an now all eyes are on U.S. Fed policy to be announced later in the evening.

The U.S. Federal Reserve (Fed) will announce its fifth interest rate decision for this year later in the night, after a two-day meeting of the Federal Open Market Committee (FOMC). From this meeting, the Fed might offer hints about a possible rate cut in September.

“Indian shares began Wednesday on a positive note, buoyed by strong cues from other Asian markets amid expectations for additional stimulus measures from Beijing to support its ailing economy,” Avdhut Bagkar Technical and Derivatives Analyst at StoxBox, said.

The European markets were trading in the green territory while Asian markets settled higher. Wall Street closed on a mixed note on Tuesday. Global oil benchmark Brent crude rose 1.88% to $80.51 a barrel.

Foreign institutional investors offloaded equities worth ₹5,598.64 crore on July 31, according to exchange data.