The News International Team
It was a sparkling start to the September series on Monday with the 50-share NSE Nifty closing above the 8000-level for first time on rebound in GDP in June quarter. Hopes of achieving FY15 fiscal deficit target on the back of lower diesel under-recovery also supported the market.
The Sensex rose 229.44 points to end at new closing high of 26867.55 and the Nifty rallied 73.35 points to 8027.70 aided by banks, oil & gas, metals and auto (select) stocks. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.57 percent and 1.3 percent, respectively.
Experts have high hope that the Nifty may start trading in five digits before the next Union Budget gets announced. They feel the earnings may be doubled by end of FY20. However, the only risk they see is global cues.
Raamdeo Agrawal, Joint MD, Motilal Oswal Financial Services expects Nifty to hit 10,000 by the next Union Budget giving way to 20-25 percent run hereon. According to him, the second Budget will be full of reforms wherein all pending issues will be addressed.
On the economic data front, gross domestic product in April-June quarter grew at 5.7 percent, the highest since the fourth quarter of financial year 2011-12, as against 4.7 percent in the year-ago period driven by manufacturing, mining and construction sectors.
The HSBC India Purchasing Managers’Index (PMI) dipped slightly from July’s 17-month high of 53.0 to 52.4 in August due to fall in output and new domestic orders but the data highlighted a tenth consecutive monthly improvement in operating conditions in August. Input cost pressures eased slightly following the acceleration seen in July.
The real stars of the day were auto and oil stocks. India’s largest car maker Maruti Suzuki reported a 27 percent year-on-year growth in August sales driven by compact cars like Ritz, Dzire, Swift, Celerio. The stock ended at new closing high of Rs 2915.50, up 4.7 percent.
Second largest commercial vehicle maker Ashok Leyland gained 6 percent post 17 percent growth Y-o-Y in August sales basis while Eicher Motors rose over 3 percent on 66 percent growth in sales led by Royal Enfield.
Two-wheeler maker Hero Motocorp topped the buying list in the Sensex, up 5.8 percent while top commercial vehicle maker Tata Motors fell 0.9 percent ahead of August sales numbers.
Oil marketing companies like HPCL, BPCL and IOC rallied 1-6 percent after the government said the diesel under-recovery in September 1-15 will be seen at Rs 0.08 per litre as against Rs 1.78 per lire in second fortnight of August.
India Ratings and Research believes that the staggered diesel price hike since end October 2012 has paved the way for diesel price decontrol and that now is the right time for the government to decontrol diesel price and allow oil marketing companies (OMCs) to price diesel according to global rates. This will help the government achieve its fiscal consolidation targets, it added.
Shares of ONGC, GAIL and Oil India gained 1 percent, 3.36 percent and 0.6 percent, respectively on hopes of lower subsidy burden going ahead. Reliance Industries also supported the market, up 1.5 percent.
In the capital goods space, engineering and construction major Larsen and Toubro was up over 3 percent followed by ABB and Siemens with 5-10 percent.
Banks were the leaders in trade today with the Bank Nifty closing above 16000 for the first time as top private sector lender ICICI Bank jumped 2.7 percent. Axis Bank and SBI were up 1.8 percent and 2 percent, respectively.
Companies related to coal block allocation case like JSPL, Hindalco Industries, Adani Power and Reliance Power shot up 3-7 percent as Attorney General asked Supreme Court to consider not scrapping those 46 blocks. Tata Steel and Sesa Sterlite gained over 2 percent.
Top telecom operator Bharti Airtel climbed 1.7 percent after Airtel Network Kenya has acquired 2.7 million subscribers of Essar telecommunications Kenya.
Shares of Cipla surged 3 percent whereas ITC, HDFC, Sun Pharma and BHEL fell 0.9-1.5 percent.
In the broader space, Voltas gained 2 percent as Bank of America Merrill Lynch reiterates buy rating on the stock with an increased target price of Rs 305 per share. Motherson Sumi was up 2.8 percent as JPMorgan reiterates overweight rating on with increased target price of Rs 410 from 310, citing multiple growth drivers in place.
Brigade Enterprises shot up 8 percent on signing MoU with GIC Singapore to set up Rs 1,500 crore JV.
Bharti Infratel rose nearly 2 percent as source said the company is eyeing acquisition of Vodafone and Idea towers in India.
Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1930 to 1001.