D-Street Buzz: Metal, IT stocks trade in the red; Hindalco, JSPL, Tech Mahindra, Wipro, Infosys fall 1-3% each

The Indian stock market continues trading in the green with Sensex up 275.78 points or 0.7 percent at 39850.35, and the Nifty gained 63.30 points or 0.54 percent at 11725.70.

Among the sectors, the auto index along with the oil & gas sector added half a percent each. On the other hand, the metal index shed over a percent..

Shares of gas producers Oil and Natural Gas Corporation and Oil India Limited rose after reports indicated that the government may consider a proposal to end price controls over locally produced gas, according to a CNBC Awaaz report.

Reliance Industries share price gained over 3 percent after it said on October 6 that Abu Dhabi Investment Authority would invest Rs 5,512.50 crore in its retail arm.

Jyoti Roy - DVP- Equity Strategist, Angel Broking feels that with thsi investment, RRVL has raised Rs 37,710 crore from leading global investors including Silver Lake, KKR, General Atlantic, Mubadala, GIC, TPG and ADIA in less than four weeks. The brokerage firm has maintained its positive view on Reliance industries and expect that the digital and the retail business will be the future growth drivers for the company.

The IT index shed half a percent after the Trump administration announced a rule that may curb US companies' use of skilled foreign workers by narrowing the definition of “specialty occupations” eligible for H-1B visas and require companies to pay higher wages to those enrolled in the visa program.

The top IT losers included Wipro, Coforge, HCL Tech and Infosys.

Shares of TCS traded flat ahead of its September quarter numbers. The company is expected to see sequential decline in Q2FY21 reported profit due to provision in EPIC legal case, but adjusted bottomline may grow in double digit QoQ.

The ramp up of large deals is likely to boost dollar revenue growth in the range of 2.5-3 percent and constant currency revenue growth could be in the range of 4.5-5 percent for the quarter ended September 2020, compared to previous quarter (Q1) which was impacted by supply-side constraints.

Metal stocks came under pressure with the top losers being Hindalco Industries, JSPL, Hindustan Zinc, NALCO and Welspun Corp.

However, Morgan Stanley has an overweight call on JSPL with target at Rs 280 per share. It is of the view that domestic volume growth was better than the industry in Q2 adding that the company is on track to deliver better volumes than full-year estimate for FY21, according to a CNBC-TV18 report.

Vinay Rajani, Technical Research Analyst at HDFC Securities has a buy recommendation on JSW Steel with target price at Rs 312 per share. The stock price is on the verge of giving breakout from consolidation which occurred in the last six weeks, between Rs 292 and Rs 268, he said.

Around 178 stocks have hit new 52-week high including names like TCS which hit new high and was trading at Rs 2,721.50 at 12:41 hours.