MUMBAI - Indian shares rose on Thursday for a second consecutive day after the cabinet approved a bill on the goods and services tax that incorporates recommendations from a parliamentary panel, and after the Federal Reserve meeting ended with no major surprises.
The cabinet approval raised some hopes for parliamentary approval, analysts said, thought the fate of the bill remains uncertain. The Sensex was up 0.67 percent, while the Nifty gained 0.65 percent.
Investors were also relieved after the Fed's statement was largely in line with expectations, still leaving the door open for a possible interest rate hike in September. "One is we are seeing the possibility of the clearance of GST and the second part is the Fed has given reasons why it won't be in a hurry to increase the rate of interest," Deven Choksey, managing director, KR Choksey Securities.
More volatility might be in store as traders close their bets before expiry of the monthly derivative contracts. "F&O expiry days are always volatile and difficult to assess. We think volatile phase of markets is likely to continue for the upcoming 2 months. Lot many variables, both local and global, at play," Vaibhav Sanghavi, Managing Director, Ambit Investment Advisors Pvt Ltd. told HuffPost India.
Hopes on the GST bill boosted logistics stocks, with Gati Ltd shares up 6.4 percent and Gateway Distriparks Ltd up 3.6 percent. Cipla rose 3.4 percent after its partner Sandoz received an approval from the U.S. Food and Drug Administration to launch a generic version of asthma drug Pulmicort Respule. The FDA approval gives Sandox 180 days of marketing exclusivity.
ITC gained 2.7 percent after reporting a 4 percent increase in quarterly profit. Bank of Baroda surged 9.3 percent after India's second-biggest state-run lender by assets reported a smaller-than-expected 23 percent fall in quarterly net profit.
Dr Reddy's jumped 4.6 percent after June-quarter profits beat analyst estimates.