Sensex rises over 240 points, Nifty up 65 points in line with positive global cues; HUL, TCS, RIL rally among early gainers

BSE Sensex rose over 246.25 points at 38,460.72 while the Nifty 50 rose by 65.65 points to 11,406.80 at 11.04 AM on Wednesday led by gains in index heavyweights HDFC twins, HUL, TCS and RIL, amid sustained foreign fund inflow.

At 10:15 am, the BSE S&P Sensex was up by 212 points at 38,427 while the Nifty 50 edged higher by 49 points to 11,390.

Most sectoral indices at the National Stock Exchange were in the green except for Nifty IT, metal and realty which slipped marginally.

The 30-share index was trading 101.53 points, or 0.27 percent, higher at 38,316 at 0930 hours. Similarly, the broader NSE Nifty rose 25.75 points, or 0.23 percent, to 11,366.90. HUL was the biggest gainer in the Sensex pack, rising over 1 percent, after the FMCG major reported a 21.18 percent rise in standalone net profit at Rs 1,848 crore for the quarter ended on 30 September.

Other gainers included Sun Pharma, TCS, HCL Tech, ONGC, Hero MotoCorp, Axis Bank, Asian Paints, HDFC duo, ITC and RIL, gaining up to 1 percent. While, Infosys, Vedanta, Tata Motors, Bharti Airtel, Tata Steel and IndusInd Bank fell up to 2 percent.

Representational image. Reuters.

Oil marketing companies Indian Oil Corp and Bharat Petroleum Corp were up 1 percent and 2 percent, respectively, and topped the blue-chip gainers on the Nifty index due to favourable oil prices.

Among losers, Infosys continued to fall for a second session and shed about 2 percent after its September-quarter earnings underscored the spending squeeze among Western clients for the company and the country’s $180 billion information technology sector at large.

In the previous session on Monday, the BSE barometer closed 87.39 points, or 0.23 percent, higher at 38,214.47, while the Nifty moved up 36.10 points, or 0.32 percent, to 11,341.15. Foreign institutional investors (FIIs) continued to be net buyers in the capital market, infusing Rs 895.63 on Monday, while domestic institutional investors sold shares worth Rs 425.15 crore, data available with the stock exchange showed. Despite sustained foreign fund inflow, domestic investors were cautious after the release of inflation data, traders said.

Retail inflation climbed to a 14-month high of 3.99 percent in September due to costlier vegetables and pulses but still remained within the RBI's comfort zone, government data showed on Monday.

The Consumer Price Index-based inflation stood at 3.28 percent in August and 3.70 percent in September 2018. The previous high was 4.17 percent in July 2018. However, the wholesale inflation in September slipped to an over three-year low of 0.33 percent.

"While the decline in the core inflation provides some comfort, the unexpectedly sharp jump in the September 2019 CPI inflation has pushed up the likelihood of a pause in the next Monetary Policy Committee (of RBI) review, unless the headline retail inflation recedes sharply in the ongoing month," Principal Economist with ICRA Aditi Nayar said.

Asian stock trade on a cautious note

Elsewhere in Asia, bourses in Shanghai, Hong Kong, Seoul and Tokyo were trading on a cautious note as Britain and the European Union on Monday began key talks to determine if they are still on course to reach amicable terms for Brexit. Exchanges on Wall Street ended in the red on Monday.

Asian stocks and Wall Street futures inched higher on Tuesday as some investors held out hope that Britain still had a chance to avoid a messy exit from the European Union at key negotiations this week.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.1 percent. South Korean shares rose 0.21 percent, while Japan's Nikkei stock index was up 1.74 percent.

Capping broader gains, however, was a perceived lack of progress coming out of US-China trade negotiations.

Reports of a “Phase 1” trade deal between the United States and China last week had earlier cheered markets but the dearth of details around the agreement has since curbed this enthusiasm with oil prices extending declines, Chinese stocks weaker and the safe-haven yen holding gains versus dollar.

Chinese stocks fell 0.38 percent on Tuesday, led by declines in the technology sector. In the onshore market, the yuan traded at 7.0654 per dollar, weaker than a one-month high of 7.0494 reached on Monday.

The focus has now shifted to Europe where officials from Britain and the EU will meet at a make-or-break summit on Thursday and Friday that will determine whether or not Britain is headed for a so-called no-deal Brexit.

“Given the parliamentary intervention, I would say the chance of a no-deal Brexit is around 10% to 20%,” said Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors in Sydney.

“If there is a deal, sterling would rally and risk assets would rally, but the reaction could be limited to a day.”

US stock futures ESc1 rose 0.23 percent on Tuesday in Asia after the S&P 500 ended 0.14 percent lower.

Traders, however, cautioned that sentiment remains fragile because the outcome of Brexit talks is far from certain and the US-China trade war remains a risk to global growth.

British Prime Minister Boris Johnson wants to strike an exit deal at an EU summit on Thursday and Friday to allow an orderly departure on 31 October.

The main sticking point remains the border between EU member Ireland and Northern Ireland, which belongs to the UK. Some EU politicians have expressed guarded optimism that a deal can be reached.

However, diplomats from the EU have indicated they are pessimistic about Johnson’s proposed solution for the border and want more concession.

In the currency market, sterling GBP=D3 edged up to $1.2620, below a three-month high of $1.2708.

The yen, often considered a safe haven in times of economic uncertainty, held steady at 108.35 versus the dollar.

Rupee depreciates 6 paise

The rupee, meanwhile, depreciated 6 paise against its previous close to trade at 71.30 in early session.

Brent futures, the global oil benchmark, fell 0.78 percent to $58.89 per barrel.