Sensex gains 100 pts, Nifty eyes 7800; IT, FMCG, pharma lead

Moneycontrol Bureau10:40 am CLSA downgrades Maruti: CLSA downgraded Maruti Suzuki, the country's largest car manufacturer, to outperform from buy and slashed target price to Rs 4,150 (from Rs 4,220 earlier), citing likely pressure on operating profit margin in next financial year.

The brokerage says outlook on Maruti’s volumes and margins has weakened, with softening passenger vehicle (PV) demand, hike in auto taxes, strengthening Yen and likely rise in auto steel contract prices. According to report, it is unlikely that Maruti will be able to pass on the entire Yen/steel cost pressures and it will see pressure on margins in FY17.

CLSA likes Maruti on a 2-3-year view given its strong franchise, product cycle and likelihood of a strong demand revival but expects modest stock returns on a 12-month view.10:20 am Oil falls: Oil futures fell in Asian trade, with US crude hitting the lowest level in more than two weeks, amid renewed worries of global oversupply after US crude inventories rose to a record high.

That increase came despite seasonal refinery utilization hitting an 11-year high, while a rise in the dollar index put further pressure on oil prices.

Brent crude futures fell 41 cents to USD 38.85 a barrel and front-month contract for US crude futures dropped 51 cents to USD 37.81 a barrel.10:00 am Market check: The market extended upside in morning trade with the Sensex rising 119.26 points to 25457.84 and the Nifty climbing 35.05 points to 7770.25. The market breadth was positive as about 1063 shares advanced against 680 declining shares on BSE.

Technology, FMCG and healthcare stocks were leaders while infra and metals stocks were under pressure.Infosys, TCS, Sun Pharma, Hero MotoCorp and NTPC rallied over a percent while ONGC and GAIL fell 1-2 percent after government slashed gas prices.