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Sensex jumps 175 pts, Nifty reclaims 12,000 on fresh trade deal hopes

NEW DELHI: Equity benchmarks Sensex and Nifty reversed losses during the last hour of trade to end higher in a volatile session on Wednesday, supported by IT and bank stocks after reports suggested that US and China were moving closer to a phase-one trade deal despite tensions over Hong Kong and Xinjiang.

Dalal Street, which was trading on a negative note, reversed course after reports said that the US and China were closer to a trade deal.

The US and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, Bloomberg reported quoting sources.

Earlier in the day, markets fluctuated between gains and losses as investors avoided long positions amid tepid global cues.

Market participants also remained cautious ahead of ahead of RBI’s monetary policy outcome, which is due on Thursday.

Analysts said that market participants are waiting for fresh triggers on both domestic and global fronts for more clues on the direction of the market. Investor sentiment in the near term is likely to remain muted due to weak macro data. But any developments around the US-China trade deal and RBI monetary policy outcome may influence market mood in the coming days.

Tata Motors was among the top gainers on BSE gaining over 7 per cent after its Jaguar Land Rover sales in the US climbed 6 per cent year-on-year in November and 19 per cent month-on-month.

Meanwhile, the government on Wednesday approved the launch of India’s first corporate bond ETF (exchange traded fund), which will allow retail investors to participate in India’s bond market. The Bharat Bond ETF aims to provide funds to central public sector undertakings and other government organisation through bond issues. They will have two maturity periods — three and ten years. The ETF will track an underlying index on risk-replication basis.

Market at a glance

BSE Sensex rose 174.84 points, or 0.43 per cent, to 40,850.29, while NSE Nifty ended at 12,037.30, up 43.10 points or 0.36 per cent.

In the 30-pack Sensex, 20 stocks ended in the green and 10 in the red, with Tata Motors finishing as the best performer and L&T the worst. YES Bank, ICICI Bank, Vedanta and Tata Steel joined Tata Motors on the gainers’ list, gaining up to 8 per cent.

RIL, Maruti Suzuki, Asian Paints and Bajaj Auto were among the Sensex stocks that declined.

The BSE Midcap index advanced 0.52 per cent, outperforming benchmark Sensex while the BSE Smallcap index rose 0.33 per cent.

BSE Metal index recorded 1.61 per cent gain on the sectoral return chart followed by Consumer Durables, Bankex and IT indices. BSE Capital Goods and Energy indices were the worst performers.

In terms of index contribution, ICICI Bank, Infosys, TCS and Tata Motors were chart toppers while RIL, L&T, HDFC Bank and ITC were the top drags on Sensex.

Expert Take

“Market turned positive supported by moderate growth in India Service PMI data for November and optimism over RBI monetary policy. RBI is likely to give more focus on economic development as benign oil prices deliver headroom for further monetary action which provide cushion for private spending. The early signs of recovery in services sector provided impetus for IT index to outperform while prevailing positivity on rate sensitive stocks supported a broad based rally,” — Vinod Nair, Head of Research at Geojit Financial Services.

Global markets

European shares bounced back from losses from a four-day slump on reports of US and China moving closer to a trade deal, which offset fears around delays in resolving their prolonged dispute.

Earlier, Asian shares closed lower as hopes of a trade deal between US-China were dashed.

Source: Economic Times