Nifty ends above 10,100 for 1st time, Sensex at record close; MPC rate decision eyed
Late strength in HDFC Bank and ITC helped the equity benchmarks end at fresh record closing high Tuesday ahead of the Monetary Policy Committee’s rate decision due Wednesday. The upside was also driven by positive global cues.
The 50-share NSE Nifty closed above the 10,100 level for the first time despite negative market breadth and contraction in July manufacturing activity.
The index hit an intraday record high of 10,128.60, before closing up 37.55 points at 10,114.65 while the 30-share BSE Sensex rose 60.23 points to 32,575.17.
Majority of experts as well as economists expect the RBI to cut repo rate by 25 basis points on August 2, which already seems priced in.
“Markets have already discounted the rate cut tomorrow. We feel the quantum of rate cut and commentary from the apex bank would be crucial,” Jayant Manglik, President, Retail Distribution, Religare Securities said.
He feels volatility will remain high with bias on positive side in rate sensitive pack. So prefer hedged positions instead of naked trades before the event outcome, he said.
The BSE Midcap index also gained half a percent despite weak breadth. About three shares declined for every two shares rising on the BSE.
Indian factory activity saw deepest contraction in more than nine years in July, especially after Prime Minister Narendra Modi’s new tax policy severely hurt output and demand. The Nikkei/IHS Markit Manufacturing Purchasing Managers’ Index fell to 47.9 in July from June’s 50.9, its lowest reading since February 2009.
Global markets were higher amid earnings reports and political uncertainty at the White House that weighed on the dollar. France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.5-0.7 percent at the time of writing this article. Asian markets digested stronger-than-expected China manufacturing PMI, with China’s Shanghai Composite, Hong Kong’s Hang Seng and South Korea’s Kospi up over 0.5 percent.
Back home, all sectoral indices ended in green, with Nifty Auto leading the charge with 1.5 percent gains after July sales data.
Maruti Suzuki (up 1.96 percent at Rs 7,859.10) and Eicher Motors (up 4.7 percent at Rs 31,504.80) ended at fresh record closing highs on the back of stronger-than-expected sales data. Escorts also rallied 5 percent.
After steady sales data, Mahindra & Mahindra was up 1.77 percent and Tata Motors gained 0.5 percent. Hero Motocorp rallied 2 percent ahead of sales numbers (reported after market hours) that grew by 17 percent YoY.
Tech Mahindra rallied 4 percent as analysts retained positive stance, expecting up to 31 percent upside in the stock after Q1 earnings beat expectations.
Godrej Consumer Products lost 7 percent and Marico fell 2.5 percent after disappointing Q1 earnings. Punjab National Bank shed 3 percent on profit booking and ahead of earnings due Wednesday.
ITC, HUL, Adani Ports, Wipro, Dr Reddy’s Labs and Cipla gained up to 2 percent whereas Lupin, ONGC, SBI, Reliance Industries, HDFC and Infosys were under pressure.
