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Nifty likely to consolidate; auto sector to be in focus

The equity benchmarks closed with slight gains on Tuesday. The RBI kept key rates unchanged in its monetary policy. The 30-share BSE Sensex rose 33.40 points to close at 26630.51 after hitting an intraday high of 26851.33 and low of 26481.31. The 50-share NSE Nifty reclaimed the 8000 level but failed to hold the same, up 5.90 points to end the day at 7964.80.

However, with the SGX Nifty down 11.50 points, the Nifty is likely to consolidate today.

On the global front, the US stocks fell with equities posting September losses and quarterly gains, as portfolio managers engaged in end-of-quarter positioning. S&P 500, Nasdaq extended quarterly win streak.

On the economic data front – the S&P Case Shiller Home Price Index rose at an annual pace of 6.7 percent in July. That is the lowest pace of growth in twenty months. US consumer confidence has fallen unexpectedly this month, to a four-month low.

In Europe, shares closed broadly higher, as investors focused on key data from the euro zone rather than the geopolitical risk posed by the protests in Hong Kong.

Two of the Asian markets, Hong Kong and Shanghai are closed. Hong Kong markets are closed until Friday, while Shanghai markets are shut until October 7.

In Japan, Bank of Japan’s Tankan survey showed business sentiment improving in the past quarter. Kospi extended losses into a fourth session.

In the currency space, dollar gained strength and trades near 4-year high. The euro languished near a fresh two-year trough having come under fire as a further slowdown in euro zone inflation intensified pressure for more stimulus from the European central bank.

From the commodities space, crude prices edge higher after posting their biggest daily decline since 2012. From the precious metals space – gold extended its losses to trade near a nine-month low and looked likely to break below the key USD 1,200/ounce level with the dollar gaining strength.

On the domestic front, the auto sector is likely to be in focus with all auto companies are expected to announce their September auto sales. Strong volume growth is expected across all segments on the back of improvement in the demand scenario in the past 2-3 months.  Hero Motocorp total September sales came in 30% higher.

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