Sensex at 6-month closing high, up 241 pts on GDP, global cues
Equity benchmarks snapped two-day losing streak and ended at six-month closing high on Wednesday after Q3 GDP data surprised economists and expansion in manufacturing PMI. The rally was backed by banking & financials, FMCG, metals and pharma stocks. Global cues, too, were positive after investors digested US President Donald Trump’s address to Congress.
The 30-share BSE Sensex rallied 241.17 points to 28,984.49, the highest closing level since September 8, 2016. It touched an intraday high of 29,029.17.
The 50-share NSE Nifty rose 66.20 points to close at 8,945.80 after hitting a day’s high of 8,960.80.
Experts expect the rally to continue in current month, though there may be intermittent consolidation.
India is in a bright spot in the global environment and demonetisation was only a temporary setback for the market, Rajat Rajgarhia of Motilal Oswal says, adding that data points now indicate things are beginning to look up.
Globally, too, investors are generally positive on equities, and commodities and so global trade looks good, says Rajgarhia. Aggregate growth will be better in the next 12 months but there are pockets of opportunities where growth will be even better, he feels.
Anand James of Geojit Financial Services says markets would now look towards Friday’s US non-farm payrolls which should shape rate hike expectations but assembly election results due next week could lend a bit of caution.
Technical analyst, Miteesh Thacker says if Nifty decisively breaks 8980 on upside then he expects Nifty to cross 9000 level that is currently a tough barrier to cross.
The broader markets underperformed benchmarks, with the Nifty Midcap rising over 0.3 percent as the gap between advances and declines narrowed. About 1630 shares gained against 1220 declining shares on the BSE.
Meanwhile, the Indian economy grew at a surprisingly fast 7 percent in October-December 2016 (against 7.4 percent in the previous quarter and 7.2 percent expansion in third quarter 2015-16) despite demonetisation.
Factory activity in February expanded for a second straight month as the Nikkei Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, rose to 50.7 in February from 50.4 in January.
Auto sales data for the month of February was mixed. Mahindra & Mahindra rallied 3 percent after reporting a 18 percent growth year-on-year in commercial vehicle sales and 11 percent growth in tractor sales but fall in passenger vehicle sales dragged total auto sales 2.9 percent.
Escorts shares also gained nearly 3 percent as tractor sales grew by 29.5 percent to 4,247 units in February YoY while Eicher Motors lost 1.9 percent as Royal Enfield sales missed analysts’ expectations, growing 19 percent YoY.
The country’s largest car maker Maruti Suzuki showed a 10.9 percent increase in total sales at 1,30,280 units in February as domestic sales grew by 11.7 percent to 1.2 lakh units YoY. The scrip closed flat. Tata Motors was down 1.55 percent ahead of sales data due later today.
The Nifty IT index gained 0.6 percent on Donald Trump’s softened immigration stance. Infosys rose 1.25 percent and TCS was up 0.55 percent.
The Realty index gained the most among sectoral indices, up nearly 4 percent followed by Metal that gained nearly 2 percent.
ITC and HDFC were leading contributors to Sensex’s gains, up 2.5 percent and 1.7 percent, respectively. ICICI Bank, Sun Pharma, Tata Steel, Axis Bank, SBI and Dr Reddy’s Labs added 1-3.7 percent whereas NTPC and GAIL lost 2 percent.
In broader space, Indian Overseas Bank rallied 3.4 percent as sources told CNBC-TV18 that the bank may consider sale of stake in its Malaysia Bank joint venture. The bank owns 35 percent stake in India International Bank (Malaysia) Berhad (IIBM) while Bank of Baroda holds 40 percent and Andhra Bank has 25 percent shareholding.
Neuland Laboratories shares shot up 20 percent after the US Food and Drug Administration accepted Teva’s new drug application for the treatment of tardive dyskinesia. However, the company declined to comment on any link between the company’s steep rise in share price and Teva getting a priority review status for its experimental drug SD-809.
Monnet Ispat surged 7.4 percent after banking sources told CNBC-TV18 that steel ministry has asked SAIL to evaluate taking over debt-laden Monnet Ispat.
European markets were higher as investors focused on earnings and fresh data releases and digested President Donald Trump’s address to Congress. France’s CAC, Germany’s DAX and Britain’s FTSE were up 1-1.5 percent at the time of writing this article. Asia also mostly closed higher.