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Bulls back in action: Sensex zooms 359pts, Nifty above 7800


TheNewsInternational Team

Bulls came back in action Thursday as the market has seen sharp rebound after a steep fall in previous session, tracking upside in global peers that reacted positively to the release of Federal Reserve’s October meeting minutes.

Rally in technology, banking & financials, oil, FMCG and auto stocks helped the 30-share BSE Sensex rise 359.40 points or 1.41 percent to 25841.92. The 50-share NSE Nifty ended tad below 7850 level, up 110.95 points or 1.43 percent to 7842.75.

Not only equity benchmarks but the broader markets also gained strength. The BSE Midcap and Smallcap indices rallied 1.2 percent and 1.3 percent, respectively. The market breadth too was positive as about two shares advanced for every share declining on the BSE.

It was short covering-led rally, which is short-lived, feel experts. They expect some correction in near term, especially after November F&O contracts’ expiry.

Sandeep Bhatia of Macquarie expects the market to correct 4-5 percent in near term as he is worried about ground situation, partly due to earnings growth in domestic scene and partly due to geo political concerns in the international arena.

Aditya Narain, Citi says the market, with significant earnings cuts has reset lower. He revises Sensex target to 29,300 for June 2016 against 35,000 earlier and introduce a December 2016 target of 32,000.

It was a good day for global markets. Asian equities closed higher with the Shanghai, Hang Seng and Nikkei rising over a percent, boosted by a positive reaction from Wall Street overnight to the release of Federal Open Market Committee’s October minutes that signaled a likely interest rate hike in December. European markets like France’s CAC, Germany’s DAX and Britain’s FTSE were trading 1-1.7 percent higher (at 16 hours IST).

Back home, auto and consumer durable stocks saw strong buying ahead of submission of 7th pay commission report later today, which is likely to propose a 23 percent hike in salaries of central government servants thereby aiding consumer sentiment. Maruti Suzuki and Bajaj Auto gained 2.6-3 percent.

Tata Motors was up 0.4 percent. Its UK subsidiary Jaguar Land Rover has launched Evoque Facelift at Rs 47.1 lakh (ex-showroom, pre-octroi price) in India today.

Dr Reddy’s Labs was the major loser on Sensex, down 2.6 percent (cutting losses from 7 percent intraday fall) after Lundin Law PC has announced that it is investigating claims against company concerning possible violations of federal securities laws. Sun Pharma was down 1.5 percent.

Infosys was up 2.7 percent after severe losses in last two days. Bank of America Merill Lynch has maintained bullish stance on the stock. Infosys lost 2 percent after it had warned investors of weaker margins in second half of current financial year 2015-16.

Index heavyweights like HDFC, HDFC Bank, Reliance Industries, ICICI Bank and ITC rallied 1-3 percent.

In the broader space, Jindal Stainless plunged 57.3 percent on demerger of three subsidiaries namely Jindal Stainless (Hisar), Jindal United Steel and Jindal Coke.

Aviation stocks were in strong demand as SpiceJet surged nearly 9 percent and Jet Airways gained 8 percent. InterGlobe Aviation (IndiGo) climbed 9.7 percent today and 50 percent from its issue price of Rs 765.

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