Amid side-ways movement, Sensex ends 106 pts higher ahead of US Fed meet

Equity markets exhibited volatility in the run-up to the US Fed meet on rate decision in next couple of days, even as benchmark Sensex clawed back into positive territory to end higher after witnessing a steep fall in early trades. [caption id=“attachment_2544812” align=“alignleft” width=“380”]  Reuters[/caption] The benchmark Sensex, although slipping below the crucial 25,000-mark in the first few minutes from the start of trading session, soon regained its lost ground and ended 106 points higher or up 0.4 percent at 25,150.35. The broader 50-stock CNX Nifty closed at 7,650.05, up 39.60 points, or 0.5 percent from previous close. Earlier in the day, the Sensex tracking the slump in other Asian indices opened over 100 points lower and dropped 176 points to touch the day’s low of 25,867.73. However, the index soon snapped its early losses to trade above the 25k-mark, with firm European markets sentiment and US index futures signalling a positive start later today helping the mood stay positive thereafter. In their mid-day trades, key European gauges such as CAC, DAX and FTSE were up over 0.6-1 percent each, while US stock futures were up over 0.5 percent each. With investors resorting to short covering in metals, IT and other frontline stocks, the Sensex scaled to a high of 25,194.15, up 150 points. The broader markets, too, displayed strength with 1,491 stocks advancing against 1,147 declines on BSE. Further, the BSE mid-cap index rose 0.7 percent, while the small-cap index gained 0.4 percent on steady bout of short covering. However, stock market participants opine that hazy global economic outlook in the wake of falling crude oil prices and China’s yuan currency hitting a fresh 4-1/2 year low will continue to dictate the trend in coming days. As the chinese currency fell sharply, the rupee also felt the heat in morning trade with the domestic unit breaching the 67-mark at 67.09 to a dollar before recovering some ground thereafter. Also, continued capital outflows and heightened worries over the US interest rate hike this week also weighed on the domestic currency, said traders. So far in the current month, overseas investors have pulled out around Rs 5,855 crore from the Indian markets, including equity and debt. This is in addition to the Rs 10,826 crore worth of funds leaving Indian shores in November. Dealers said domestic equities may remain range-bound with a mixed bias in the next few sessions as the focus clearly will be on the US Fed, which is expected to take a rate hike for the first time in nearly one decade. Also, the passage of GST Bill still hanging fire due to persisting adjournment of parliament has also been a major deterrent for markets, said dealers. Leading the recovery on the back of selective short covering, shares of Hindalco rose 3 percent to Rs 78.60, Coal India jumped 2.6 percent to Rs 315.70, Hindustan Unilever & Maruti gained nearly 2 percent each to Rs 837.20 and Rs 4,569.80, respectively, and Tata Steel rising 1.7 percent to Rs 245.05.