Bangalore:
Indian stocks rose for a second session in a row on Wednesday as banking crisis concerns eased further as investors braced for a crucial interest rate decision from the US Federal Reserve.
The Nifty 50 index closed 0.26% higher at 17,151.90, while the S&P BSE Sensex rose 0.24% to 58,214.59.
Nine of the 13 major sector indices rose 0.83% and 1.04% respectively for public sector banks and pharmaceutical stocks.
The rise follows a rise in global stocks after US Treasury Secretary Janet Yellen vowed to protect depositors at smaller banks in an effort to calm nerves.
The Swiss government-backed takeover of Credit Suisse by UBS over the weekend allayed concerns about financial stability for now.
Global markets now await the Fed’s monetary policy decision, expected later today. The probability of an increase of 25 basis points (bps) is 89.3%.
Most analysts expect the Fed to raise rates by 25 basis points to fight inflation, but Goldman Sachs said a pause would be “justified.”
“The recent banking turmoil is an unintended consequence of the Fed’s sharp rate hikes,” said Deven Choksey, CEO of KRChoksey Holdings.
Information technology (IT) companies, which derive a significant portion of their revenue from the United States and Europe, could come under pressure in the near term due to bank stress, analysts said.
HCLTech closed lower after a slowdown in European bookings and pressure on discretionary technology spending at its US investor meeting.
“If the banking crisis spreads, it will hurt IT companies, which are almost 30% exposed in the banking, financial services and insurance segments,” said Narendra Solanki, head of equity research, Anand Rathi Shares & Stockbrokers.
Bajaj Finance rose 2.17% after Morgan Stanley raised its fiscal year 2023 earnings estimates by 2%, citing higher credit growth and net interest margin.
Sobha fell almost 13% after the company reported that the income tax department had raided its offices.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)