Sensex ends 75 pts up; auto, pharma rally, Hindalco up 5%

Indian equity benchmarks gained strength in late trade with the NSE Nifty closing above the 5600 level on Wednesday, helped by banking & financials, auto, technology and healthcare shares.

The 30-share BSE Sensex bounced back following 205 points fall yesterday after RBI policy; gained 74.53 points to close at 18,505.38.

Meanwhile, the 50-share NSE Nifty rose 21.80 points to 5,619.70.

But the benchmarks shed 1.4 percent in October owing to rising inflation, unchanged in policy rates, raising provision limit for banks and disappointing earnings. The profit booking was another reason behind this fall because the market had rallied over 6 percent in September following reforms by the government and inflow of foreign money after unlimited bond buying plans unveiled by Federal Reserve & ECB.

Going forward, US elections that will be taking place on November 6 and winter parliament session will be closely watched by investors next month.

If the government continues its reform process, founder of Citrus Advisor, Sanjay Sinha feels the market should see actually going up even higher from the current levels.

“Only setback that I see is the winter session of the Parliament where some of the policy measures that have been announced would be put to test of the voting. If there is fair amount of obstruction then there could be some amount for disappointment or some retracement. Otherwise I think there is a clear ground now for the market to go up even more,” he explained.

Shares of Hindalco Industries, an aluminium major, shot up 5 percent, topping the buying list after the company has secured stage 1 forest clearance for Mahan coal block (a joint venture between Essar Energy and Hindalco), which was allocated in 2006.

Auto stocks remained in bull grip since opening today as these companies will declare their sales numbers for October tomorrow. Commercial vehicle maker Tata Motors and top car maker Maruti Suzuki gained 3 percent on upgrade by brokerages.

India’s largest lender State Bank of India was up 1.7 percent while its rival ICICI Bank rose 0.5 percent on short covering. Housing finance company HDFC went up 1.4 percent.

Drug producer Dr Reddy’s Labs spiked 2 percent, which had gained 1.6 percent yesterday due to strong numbers in Q2. Shares of Cipla and Sun Pharma moved up 2.5 percent and 1.7 percent, respectively.

State-owned oil & gas producer ONGC and gas transmission company GAIL were down 1.7 percent each.

Power equipment maker BHEL fell 1.3 percent, continuing the fall since it disappointed the street by its numbers on every count in Q2.

FMCG major Hindustan Unilever went down 0.55 percent, extending the downward journey after poor volume growth in second quarter.

Cigarette major ITC and telecom operator Bharti Airtel lost 0.4 percent each. Engineering conglomerate Larsen & Toubro moved down 0.8 percent.

In the second line shares, Jammu & Kashmir Bank, which hit a new high of Rs 1,239 today, gained 9.4 percent after solid numbers in September quarter.

Karur Vysya Bank and Glenmark Pharma rallied 6-8 percent following strong quarterly earnings.

Two-wheeler maker TVS Motor dropped 2.76 percent as its net profit fell 41 percent year-on-year to Rs 45.2 crore in Q2FY13.

The BSE Midcap Index was up 0.88 percent and the Smallcap up 0.5 percent.

On the global front, the US equity markets will start trading today after closing for last two days on Hurricane Sandy. The Dow Jones, Nasdaq and S&P 500 futures up 0.4-0.5 percent, indicating positive opening.