Sensex, Nifty, Midcap hold early gains; ICICI, Bajaj Auto rally

11:55 am Analysts on auto sales:February sales of major auto firms slowed, largely due to demonetisation woes. Passenger vehicles overall posted steady numbers, but two-wheeler sales lagged as the rural market was still recovering from cash crunch issues.

Analysts cite demand issues for the sector in general, but feel it may improve as cash situation gets better.

11:45 am Interview: The demonetisation impact has not fully subsided and two-wheeler companies might continue to feel the pain for a few more months, according to S Ravikumar, President, Business Development at Bajaj Auto.

The 16 percent jump in exports is largely due to a base effect, he said, pointing out it is good that the numbers have held up around 1.1 lakh units for the last three months. The company has started shipments to Malaysia and the new market expansion might gradually help in adding to export numbers, he said.

Bajaj’s total February sales were fractionally up year-on-year at 2.73 lakh units from 2.72 lakh. However, exports were up 16 percent at 1.1 Lakh units.

While acknowledging the compaetitor Royal Enfield, he said, in-house Dominar is also being well-retailed and well-received in the market.

11:35 am Acquisition: IT services firm Cognizant today said it has acquired Japanese company Brilliant Service Co for an undisclosed amount.

“As part of the acquisition, a team of 70 professionals with extensive digital solutions experience and insights in the Japanese market will join Cognizant,” Cognizant said in a statement.

Headquartered in Osaka, Brilliant is a products and solutions company that specialises in digital strategy, product design and engineering, the Internet of Things (IoT), and enterprise mobility.

11:20 am Banks to start charging transactions: Major private banks have begun reintroducing transaction charges for cash deposits and withdrawals at their branches in a move that is being seen as one aimed at discouraging cash transactions and furthering the Prime Minister Narendra Modi and his government’s digital payments drive.

Banks including HDFC Bank, ICICI Bank and Axis Bank on Wednesday began charging a minimum amount of Rs 150 per transaction for cash deposits and withdrawals beyond four free transactions in a month.

ATM intercharge charges have also been re-introduced.

The charges would apply to savings as well as salary accounts effective from Wednesday, leading private sector player HDFC Bank said in a circular.

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11:00 am Market Check

Equity benchmarks retained early gains, with the Nifty inching towards psychological 9000 level, supported by auto, metals, banking & financials and oil stocks. However, ITC and Infosys capped upside.

The 30-share BSE Sensex was up 123.30 points at 29107.79 and the 50-share NSE Nifty gained 36.50 points at 8982.30. The broader markets were also up 0.4 percent on positive breadth.

Liquidity will continue to drive the market higher going ahead as the rally in the global markets continues, said Ajay Srivastava of Dimensions Corporate Finance Services. He said investors need not bother with market fundamentals as long as liquidity flows into the market.

However, sagging Indian economy is a concern, which may impact the rally, he feels.

About 1464 shares advanced against 891 declining shares on the Bombay Stock Exchange.

Tata Motors was biggest gainer on Sensex and Nifty, up 3.5 percent after Bank of America Merrill Lynch has reiterated a buy call on the stock, with increased target price at Rs 580 from Rs 560 as it expects the valuation multiples to expand as well.

Jaguar Land Rover’s North America sales grew by 16.4 percent to 9,231 units, aided by Jaguar that showed a whopping 130.4 percent increase at 3,484 units. However, Land Rover sales fell 10.4 percent to 5,747 units YoY.

Bajaj Auto gained over a percent after auto sales data. Its total sales increased to 2.73 lakh units in February 2017 from 2.72 lakh units in year-ago month, driven by exports.

ICICI Bank gained 1.6 percent after a media report indicated that global private equity firms including The Carlyle Group, Warburg Pincus Llc and Advent International have evinced interest in acquiring the 35 percent stake in ICICI Lombard General Insurance held by Canadian financial institution Fairfax Financial Holdings.