The Indian stock market traded higher on Thursday, with Sensex and Nifty rising up to 0.8% after the Federal Reserve kept its interest rates unchanged, along with other factors that boosted investor sentiment, although traders would likely brace for expiry-day volatility.
Sensex jumped more than 600 points to rise above 73,860 while Nifty 50 gained 175 points to near 22,875. Broader markets also gained, with Nifty Smallcap 100 and Nifty Midcap 100 rising up to 0.6%.
Adani Ports shares jumped more than 4% to lead gains on Sensex, while Power Grid, Kotak Mahindra Bank, HUL, NTPC, ITC, Reliance Industries, Titan, TCS and Infosys shares gained 1-3%.
Among the sectoral indices, Nifty FMCG gained around 2% to lead gains, while Nifty PSU Bank, Nifty IT and few others gained up to 1%. Nifty Auto, however, slipped into the red. The overall market breadth remained positive, with NSE seeing 1,995 advances against 1,228 declines, while 105 stocks remained unchanged.
Here are the key factors boosting market today:
The Federal Reserve kept its key rate unchanged at about 3.9% despite stubbornly high inflation, as Chairman Kevin Warsh suggested its policies are already showing signs of having an impact. This came after a quarter-point interest rate hike last month, marking the first time in three years
While Warsh didn’t provide too much insight into what the Fed may do next, most economists still expect the central bank to hike its key rate another quarter-point at its next meeting on December 8-9. Wall Street investors now see the odds of an increase at nearly 85%, according to CME Fedwatch.
2) Rising hopes for LTCG tax cuts
The rise in the Indian stock market also comes amid rising hopes for a rejig to India’s long-term capital gains tax (LTCG), which was triggered recently after Finance Minister Nirmala Sitharaman said discussions around long-term capital gains tax (LTCG) and securities transaction tax (STT) were ongoing.
A potential cut in India’s long-term capital gains tax (LTCG) could offer foreign investors a reason to return to a market they have steadily abandoned, with banks, energy companies and other largecaps positioned to benefit the most, according to Jefferies.
Also read | Potential LTCG tax cut could revive FIIs’ India bet, says Jefferies: Which stocks may benefit most?
Foreign investors remained net buyers of Indian equities worth around Rs 872 crore on Wednesday, according to provisional data on NSE. FIIs have been sparsely buying Indian equities recently after a sharp selloff earlier that rattled the market.
FIIs net bought Indian equities worth Rs 4,198 crore on Tuesday, Rs 2,098 crore on Friday and so on. A definitive trend reversal is however yet to be confirmed by analysts.
More to come...
