Markets build on gains ahead of Fed decision; Nifty reclaims 11,600

Equity benchmarks darted up for the second straight session on Wednesday as banking, auto and IT stocks saw robust buying amid mixed global cues.

A strengthening rupee and supportive comments by the RBI Governor also bolstered investor sentiment, traders said.

The 30-share BSE Sensex jumped 258.50 points or 0.66 per cent to close at 39,302.85. The broader NSE Nifty rose 82.75 points or 0.72 per cent to finish at 11,604.55.

M&M was the top gainer in the Sensex pack, climbing 4.24 per cent, followed by Bajaj Auto, Sun Pharma, HDFC Bank, Infosys, L&T and UltraTech Cement.

On the other hand, IndusInd Bank, NTPC, SBI, ONGC, Bharti Airtel and Axis Bank were among the laggards, skidding up to 1.80 per cent.

According to traders, stock-specific action and sustained foreign fund inflows drove domestic equities higher, despite mixed cues from global markets ahead of the US Federal Reserve's policy outcome.

Foreign institutional investors bought equities worth Rs 1,170.89 crore on a net basis on Tuesday, exchange data showed.

RBI Governor Shaktikanta Das on Wednesday said economic recovery is still not well entrenched and that the central bank is "battle ready" to take appropriate measures for liquidity and growth.

Das said Q1 GDP data was a "reflection of the ravages of the COVID-19", but high-frequency indicators like PMI numbers point to some stabilisation of economic activity.

Benchmark indices ended the day with gains, with most sectoral indices contributing to the gains. However, the continued border tensions and unabated virus infections limited the gains.

"Global cues were also positive as participants awaited policy statement from US FOMC meeting. Any indication of increased bond-buying will be a positive trigger for the markets. Markets are expected to be in sync with global cues tomorrow. Upsides seem to be limited, considering the lack of fresh domestic triggers for the market," said Vinod Nair, Head of Research at Geojit Financial Services.

BSE realty, healthcare, auto, IT and basic materials indices ended up to 2.37 per cent higher, while utilities, telecom, power and oil and gas indices closed with losses.

Broader BSE mid-cap and small-cap indices rose up to 0.44 per cent.

In rest of Asia, bourses in Shanghai, Hong Kong and Seoul ended in the red, while Tokyo settled with gains.

Stock exchanges in Europe were trading on a positive note in early deals.

Global oil benchmark Brent crude was trading 2 per cent higher at USD 41.34 per barrel.

In the forex market, the rupee strengthened by 12 paise to finish at 73.52 against the US dollar. 

READ | Markets Reel Amid Global Selloff; Banking, Finance Stocks Bear The Brunt

READ | Markets Ride Reliance Rally; Sensex Zooms 646 Pts