(MENAFN- Gulf Times) India's stocks headed for their steepest gain in seven sessions, paring the week's losses, ahead of a press conference by Finance Minister Nirmala Sitharaman in Delhi.
The S & P BSE Sensex climbed 0.6% to 36,701.16 at the close in Mumbai, reversing a drop of as much as 1% and paring the weekly loss to 1.7%. The NSE Nifty 50 Index gained 0.8%.
The benchmark Sensex has slumped 7% since the July 5 budget that introduced a new tax targeting the super-rich, but few measures to revive stalling economic growth. Foreign portfolio investors became an unintended target of the wealth levy.
'The expectation is the FPI surcharge may be ruled out, said Dharmesh Kant, head of retail research at Indianivesh Securities in Mumbai. 'Investors who were sitting on short positions have squared it off to play it safe for Monday.
Sixteen of 19 sector sub-indexes compiled by the BSE rose, led by a gauge of oil and gas companies Reliance Industries Ltd contributed the most to the Sensex's advance, rising 2.4%. Vedanta was the best performer, gaining 5.8%; ITC Ltd was the biggest drag on the Sensex, falling 1.5%. IndusInd Bank Ltd was the worst performer, falling 1.8%.
Investors exercised caution ahead of the speech by Federal Reserve chairman Jerome Powell and await possible clues on interest rate cuts.
The world's central bankers have gathered at Jackson Hole to discuss economic and monetary policy. The event started on Thursday and will end today.
Powell will speak and traders will look for guidance on whether the central bank might cut rates at its next policy review meeting in September.
Several Federal Reserve officials have voiced their opposition to lowering of interest rates before Powell's speech at Jackson Hole.
Three Fed policy makers were against the notion that the US economy needs lower interest rates, and a fourth member said he wanted to avoid taking further action 'unless we have to, foreshadowing a sharp debate with officials who want to cut rates again.
'The recent fall (in equities) is a result of growing uneasiness among the participants as they're keenly awaiting some action from the government to boost the market sentiment.
Besides, feeble global cues are further adding to the negativity, said Ajit Mishra Vice President, Research, Religare Broking.
Mishra said Nifty has now reached closer to its immediate and critical support of 10,750 points so there may be some consolidation or a pause ahead. He has suggested continuing with the 'sell on rise approach and focusing more on stock selection.
Edelweiss Financial Services Ltd fell 6% after a report in the Business Standard said the Enforcement Directorate (ED) was examining an investment of Rs450 crore made by Edelweiss Asset Reconstruction Company (ARC) in Kohinoor CTNL Infrastructure.
Meanwhile rupee yesterday weakened past the 72 mark against the US dollar, clocking a fresh low of this year, before staging a sharp recovery. Opening at 71.95 a US dollar, the rupee fell to 72.0450 at day's low its weakest since mid-December. But the Indian currency recovered to 71.57 on reports that the government may roll back higher surcharge on foreign institutional investors. The rupee was trading at 71.62 a dollar as compared to Thursday's close of 71.81 a dollar.
The rupee is down about 3% so far this year against the US dollar, hurt by a slowing economy and recent outflows from equity markets.
Meanwhile, global rating agency Moody's yesterday cut its growth forecast for India for 2019 by 60 basis points to 6.2%. The GDP figures for June quarter will be announced this month-end.
Foreign investors sold over Rs900 crore (net) of Indian equities on Thursday. Over the past two months, foreign investors sold Indian equities worth over $3bn after the government increased surcharge on FPIs in the July Budget.
'Technically, USD-INR August futures have a resistance at 72.15 and 72.32 while find the support at 71.40, HDFC Securities said in a note. RBI this week released minutes of its August meeting and signalled its intention to support growth by easing monetary policy further.
Currency traders will be looking ahead to a speech by Federal Reserve chair Jerome Powell for clarification on whether the US central bank remains on course to deliver another interest rate cut in next month. Powell is due to speak at a gathering of central bankers in Jackson Hole, Wyoming.
Elsewhere, global equity markets and the US dollar was mostly higher, suggesting markets remain broadly confident of further Fed easing.
MENAFN2308201900670000ID1098919268
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.