Moneycontrol Bureau
Equity benchmarks extended gains on Monday with the Nifty closing above 8700 level for the first time since October 6, supported by ICICI Bank, Tata Motors and ONGC. Positive global cues also lifted the market sentiment. The Sensex had rallied 1.5 percent last week.
After a consolidation, the 30-share BSE Sensex was up 101.90 points at 28179.08 and the 50-share NSE Nifty gained 15.90 points at 8708.95. The BSE Midcap underperformed benchmarks despite positive breadth. About 1679 shares advanced against 1168 declining shares on the exchange.
Experts continue to expect the market to be in range of 8500-8900 till the end of December as US elections and Federal Reserve's December meeting will add to volatility.
"Currently, we are in a bounce and the bull market will begin only after Nifty touches 9100, which will happen next year, Harendra Kumar of Elara Capital said.
He believes the second quarter earnings season has not been a directional change for markets.
State-run oil & gas explorer ONGC surged 4.6 percent as the board of directors will consider a proposal for declaration of bonus issue, if any, in its meeting, scheduled on October 27.
ICICI Bank continued its run up started last week on hopes of getting loan payment from Essar Group after Essar Oil-Rosneft deal. The stock was the biggest contributor to Sensex's gains, up 2.5 percent in addition to 14.8 percent rally in last week.
Wipro lost 3 percent due to lower-than-expected guidance. The IT services provider expects 0-2 percent growth in Q3 dollar revenue while analysts estimated 1-3 percent growth for the quarter.
Asian Paints (down 2.25 percent), HDFC Bank (down 0.39 percent), Axis Bank (down 1.01 percent), Dr Reddy's Labs (down 0.6 percent) and Zee Entertainment (down 1.8 percent) were under pressure ahead of second quarter earnings on October 25. However, Kotak Mahindra Bank gained 1 percent.
In the broader space, Mindtree lost 4.8 percent after profit in Q2 fell 23 percent on sequential basis. Macquarie cut its FY17-19 EPS estimates by around 15 percent and lowered target multiple to 12x (from 14x earlier due to uncertainties). Consequently, it downgraded the stock to underperform with a lower target price of Rs 400 (against Rs 550 earlier).
Lakshmi Machine Works surged 5 percent as board of directors will consider buyback proposal on October 26.
On the global front, European stocks were higher with investors focused on fresh economic data and corporate earnings. France's CAC and Germany's DAX gained 0.8 percent each at the time of writing this article. Asia ended mixed with Japan's Nikkei rising 0.3 percent while China's Shanghai and Hong Kong's Hang Seng advanced 1 percent each.
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