Moneycontrol Bureau
Equity benchmarks saw yet another record closing high with the Nifty hitting 7900 level intraday on Tuesday, maintaining upward move for the sixth consecutive session supported by positive global cues and easing geo-political tensions.
The 30-share BSE Sensex rose 29.71 points to 26420.67 while the Nifty hit a record high of 7918.55, before ending the day at 7897.50, up 23.25 points compared to previous day’s closing value. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices climbing over a percent each.
Experts remain positive on the market on hopes that the number of reforms to improve the economy will get announced going ahead. They advise staying invested in this market.
“The Independence Day speech of the Prime Minister clearly tells us that the focus is now going to move towards a greater emphasis on creating infrastructure, making manufacturing easier. Therefore we do think that the long-term outlook continues to be very positive and we would continue to put incremental money to work in the markets,” said Sashi Krishnan, CIO, Birla Sun Life Insurance.
According to Pathik Gandotra, partner, Dron Capital, corporate earnings will grow at an average compounded rate of 20 percent over the next three years.
On the global front, Asian markets closed higher with the Nikkei rising 0.8 percent and European markets were trading at 0.4-1 percent (at 16 hours IST) following strong Wall Street closing last night (on easing tensions in Russia).
Back home, auto, capital goods, power and banks (select) stocks supported benchmark indices while FMCG and HDFC twins lost ground.
Auto stocks were leaders of the day with the BSE Auto Index gaining more than 2 percent. Tata Motors and Mahindra and Mahindra topped the buying list as well as ended at record closing high of Rs 518.75 and Rs 1374.55, up 3 percent and 3.7 percent, respectively.
Top car maker Mauti Suzuki too saw all-time closing high, up 1.6 percent after Deutsche Bank maintains the stock as its top pick in the Indian auto sector with a target price of Rs 3000 a share. Decline in gasoline prices in India by 4 percent from the beginning of FY15 is a positive development for entry-level car (Alto/WagonR) demand, said the brokerage.
Two-wheeler makers Bajaj Auto and Hero Motocorp gained 2.5 percent and 1.3 percent, respectively. Capital goods majors BHEL (up 2.8 percent), and Larsen and Toubro (up 1.3 percent) too were on buyers’ radar.
Shares of Sesa Sterlite advanced 1.5 percent after Goa government's announcement of resuming operations in the mining industry by the year-end.
Among banking and financials, State Bank of India, ICICI Bank and Axis Bank rose nearly a percent while HDFC Bank lost a percent. Housing finance company HDFC plunged 2.5 percent.
TCS dropped 2 percent followed by ITC, Reliance Industries, Sun Pharma, Hindustan Unilever, Hindalco Industries, Infosys and Tata Steel with 0.2-0.8 percent.
In the midcap space, Manappuram Finance surged 19 percent. Muthoot Finance, Shoppers Stop, Sadbhav Engineering and Jyothy Labs rallied 8-10 percent while Bhushan Steel, Prestige Estate, Engineers India, Pine Animation and ALSTOM India fell 2.5-5 percent.
Oil retailers IOC, HPCL, BPCL surged 1.5-4 percent as the diesel under recovery dropped to record lows. Government sources told CNBC-TV18 that diesel should be deregulated by October-end.
Goldman Sachs sees almost no losses on diesel after September price hike and expects greatest upside for HPCL and BPCL with improving marketing margins. As losses on retail diesel sales are now down to Rs 0.8 per litre, Goldman Sachs estimates it to fall to Rs 0.3 per litre after the price hike on September assuming oil prices and diesel cracks remain around current levels.
Advancing shares outnumbered declining ones by a ratio of 1660 to 1285 shares on the Bombay Stock Exchange.
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