Equity benchmarks were trading with smart gains in the afternoon session on November 3, joining a global relief rally as a pause by the US Federal Reserve rekindled hopes that interest rates have reached their peak.
Strong corporate results also triggered stock-specific buying.
At 12.01 pm, the 30-pack BSE Sensex was trading 323.74 points, or 0.51 percent, higher at 64,404.64, while the broader NSE Nifty climbed 111.10 points or 0.58 percent to 19,244.35.
A total of 2,439 stocks advanced, 1,011 declined and 144 counters remained unchanged on the BSE.
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All sectors were trading in the green, led by realty, services, auto, oil & gas, consumer discretionary, energy, financial services and consumer durables.
The BSE mid-cap index spurted 0.75 percent while the small-cap gauge gained 1 percent.
Continuing their selling spree, foreign institutional investors (FIIs) offloaded Indian shares worth a net Rs 1,261.19 crore on November 2, while DIIs bought to the tune of Rs 1,380.15 crore.
Tata Motors was the top gainer in the Sensex pack, vaulting over 2.5 percent, after its return to profitability in the second quarter impressed brokerages.
The homegrown automaker returned to the back largely due to a pick-up in volumes in the domestic market, softening commodity prices, a volume ramp-up at its luxury car subsidiary Jaguar Land Rover (JLR), and improved operating leverage.
During the July-September quarter, it reported a consolidated net profit of Rs 3,764 crore, as against a consolidated net loss of Rs 945 crore in the corresponding quarter last year. Tata Motors' net revenue increased to Rs 105,128 crore.
Global brokerage firm Jefferies has suggested that Tata Motors luxury car unit Jaguar Land Rover is poised to have an even better second half, fuelled by a ramp-up in volumes, and higher Range Rover (RR) and RR Sport capacity. With a buy call on the scrip, analysts have assigned a target price of Rs 800. This implies an upside potential of nearly 28 percent. JLR has also raised its FY24 EBIT margin guidance to 8 percent from 6 percent.
Another Tata Group firm Titan was the second biggest gainer among Sensex constituents, rising 1.5 percent, ahead of its Q2 results.
Titan Company is expected to report strong on-year revenue growth in Q2, on the back of robust wedding purchases and high-value studded purchases. However, net profit growth is likely to be muted as margins take a hit on a high base.
Titan’s fiscal second-quarter net profit is likely to rise 1.9 percent year-on-year to Rs 889 crore according to a poll of analysts’ estimates. The jewellery-to-watch company is expected to deliver a revenue growth of 18.8 percent year-on-year to Rs 10,449 crore in the July-to-September quarter.
Titan’s operating profit margins for Q2 FY24 are likely to fall by 178 basis points year-on-year to 12.48 percent. Margins will be impacted by a higher base due to studded inventory gains last year and higher consumer activations and promotions, said domestic brokerage firm Prabhudas Lilladher.
Maruti Suzuki was trading marginally higher after the company reported improved production figures for the month of October.
The company's total production for October rose 13 percent at 1,76,437 vehicles against 1,56,067 vehicles in October 2022.
The company had reported its highest-ever monthly sales at 1,99,217 units in October 2023, a 19 percent year-on-year growth against 1,67,520 units in October 2022.
In contrast, NTPC, Bajaj Finance, Nestle and Tata Steel were trading with cuts of up to 0.32 percent.
In the Nifty pack, Adani Enterprises was trading 1.31 percent higher even after the Adani group flagship reported a 51 percent on-year decline in net profit at Rs 227.8 crore in the September quarter due to decreasing coal prices. Its revenue from operations came in at Rs 22, 517 crore, falling 41 percent from the year-ago period.
According to analysts, Adani Enterprises has made significant progress in its strong incubation pipeline during the first half of FY24. "The company's result showcases the emergence of key incubating businesses, including green hydrogen integrated manufacturing ecosystem, airports and roads, which collectively contributed 48 percent of the overall EBITDA," said Shreyansh Shah, research analyst, StoxBox.
World stocks were headed for their biggest weekly rise in a year on Friday, while bonds rallied and the dollar was on the back foot as investors cheered the pause in US interest rate hikes.
US jobs data due later in the day is the next major focus.
Benchmark 10-year Treasury yields are down more than 20 basis points in two sessions since the US Federal Reserve left rates on hold on Wednesday and Chair Jerome Powell said risks to the outlook for rates settings was balanced.
Asia-Pacific markets marched higher, with investors accessing a fresh round of data for more clues on the health of business activity through the region.
China’s service sector expanded at a slightly faster pace in October, with the Caixin services purchasing managers index at 50.4, just above September’s reading of 50.2.
Hong Kong’s Hang Seng index strengthened 2.24 percent, while China’s CSI 300 rose 0.89 percent.
South Korea’s Kospi rose 1.09 percent, while the Kosdaq was up 1.04 percent. In Australia, the S&P/ASX 200 ended 1.14 percent higher.
"Market history tells us that sharp up moves in the market happen at unexpected times. It appears that this truism is turning out to be true. The Fed decision to hold rates and refrain from making hawkish indications has emboldened the bulls to make a strong comeback in the mother market US with S&P rising 1.9% yesterday,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Good earnings numbers and expectations that the interest rate will remain stable for now and will decline in H2 of CY2024 have facilitated market recovery.
“The positive global sentiments can embolden the bulls in India to stage a comeback. Since FIIs are short in the market, short covering is a possibility. Investors should remember that the buy on dips strategy has worked in this market. It is likely to work again. High quality large-caps in financials, automobiles and capital goods are on strong wicket. Mid-cap IT is doing well," he added.
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