BSE Sensex eyes 19000; metals & FMCG support, ITC up 5%

Moneycontrol Bureau
Live Market Commentary

1:50 pm Market outlook: Trader Atul Suri feels that the Nifty will extend its current pullback to 5,700-5,900 levels in the near-term, but will see a sharp fall to levels of 5,000 in the long-run. "We are in for a short-term spike up and then we may have another leg down", he told CNBC-TV18.

The market has been extremely oversold and is due for a bounce back for the short-term, he told CNBC-TV18. Information Technology (IT) stocks will continue to see an uptrend and the index may revisit the highs witnessed in the year 2000. Pharma pack's performance will also be similar to that of IT, he adds.

1:40 pm Buzzer: Ashok Leyland reported a 2.5 percent month-on-month growth (down 24 percent year-on-year) in its August sales data, supported by strong commercial vehicle sales. The shares jumped 4 percent Monday.

Commercial vehicle maker sold 7,139 units in August as against 6,967 units in previous month and 9,432 units in a year ago period.

Commercial vehicle sales (excluding Dost) of the Hinduja Group flagship company increased 4.77 percent M-o-M (a fall of 25 percent Y-o-Y) to 4,939 units in August.

1:30 pm Update: Prime Minister Manmohan Singh and Finance Minister P Chidambaram have rejected the Oil Ministry's proposal of keeping petrol pumps open only from 8 am to 8 pm, reports CNN-IBN. Reacting to the proposal, Chidambaram said, "It's not a government suggestion but one which had come from the public as the Oil Minister has himself clarified. Should the government close itself to the public's suggestions?"

This came after the government faced criticism over the Oil Ministry's proposal. Petroleum Minister Veerappa Moily was on the backfoot after his suggestion of having petrol pumps open for 12 hours in a day.

He said that the idea to keep petrol pumps open from 8 am to 8 pm was not the government's idea but had come from the public. He went on to say that the ministry has not taken any decision yet and no decision will be taken to keep petrol pumps dry in any part of the country.

1:20 pm Macro outlook: Robert Prior-Wandesforde, Director, Asian Economics Research, Credit Suisse belongs to the camp who believes that India's fundamentals remain strong despite the country growing slowest in four years in April-June quarter. India's first quarter GDP came in at a lower-than-expected 4.4 percent as the manufacturing and mining sectors contracted.

The next event that market will be closely following is September 18 mid-quarter review of monetary policy. According to Wandesforde, market is expecting positive credit commentary from new RBI governor Raghuram Rajan. He further added that the government needs to be proactive rather than just reacting under pressure.

Live now: Chat with Udayan Mukherjee on market

It is a positive session on Dalal Street. The Sensex pockets 295.32 points or 1.59 percent at 18915.04 while the Nifty adds 82.15 points or 1.50 percent at 5553.95.  About 1217 shares have advanced, 707 shares declined, and 119 shares are unchanged.

It's a mixed August auto sales picture. Tata Motors' total sales down 30 percent year-on-year while M&M’s total sales slip 17 percent. Maruti though reported 5 percent month-on-month growth in sales to 87,323 units. Two-wheeler major, Bajaj Auto also sees a 5 percent uptick in total sales versus last month.

The rupee recoups early losses on dollar sales by banks. Dealers also say there is absence of too much dollar demand from importers and FIIs. Bond prices rise as dealers expect the RBI to detail open market purchase of gilts for the week. The sentiment is also positive as the auction for the 10-year benchmark gilt auction witnessed strong demand on Friday.