Market ends 1% higher; auto stocks in top gear

Indian benchmark indices Sensex and Nifty closed in the green on September 6, underpinned by hopes of a trade truce between the US and China and stimulus from major central banks of the world.

The European Central Bank is all but certain to approve new stimulus measures on September 12 to boost an ailing economy. On the other hand, China’s central bank said it was cutting the amount of cash that banks must hold as reserves for the third time this year, releasing a total of 900 billion yuan ($ 126.35 billion) in liquidity to shore up the slowing economy, Reuters reported.

Besides, investor sentiment improved on rupee’s sustained rise against the dollar. The government’s signal that it will take steps to support the domestic auto sector further fostered the sentiment.

Extending the gains into the third consecutive session, the rupee settled 12 paise higher at 71.72 per dollar.

The BSE Auto index emerged as the top sectoral gainer after the government hinted at the possibility of a GST cut from the highest slab of 28 percent.

Sensex ended with a strong gain of 337 points or 0.92 percent at 36,981.77, with 23 stocks in the green.

Tech Mahindra, Maruti, Axis Bank, Tata Steel and NTPC closed as the top gainers in the index.

Yes Bank, Sun Pharma, HCL Technologies, Tata Consultancy Services, Hindustan Unilever, ITC and HDFC were the biggest losers from the Sensex kitty.

The Nifty index settled at 10,946.20, up 98 points or 0.91 percent. Among the 50 stocks in the index, 35 logged gains.

BSE Midcap and Smallcap indices underperformed Sensex, rising 0.61 percent and 0.79 percent, respectively.

On the sectoral front, BSE Auto closed 2.54 percent up. Eicher Motors (up 4.26 percent), Maruti (up 3.61 percent) and Bajaj Auto (up 2.90 percent) logged healthy gains.

BSE Power closed with a gain of 2.09 percent. Of the 16 constituent stocks, only two – JSW Energy (down 1.21 percent) and NHPC (down 0.62 percent) failed to perform.

BSE Realty (down 0.71 percent) and FMCG (down 0.16 percent) were the two indices that closed in the red.

Friday’s rally in the market lifted the cumulative market capitalisation of BSE listed firms to Rs 1,40,28,104.23 crore from Rs 1,39,19,321.96 crore from September 5, making investors richer by Rs 1.09 lakh crore in a single day.

For the week, Sensex fell 0.94 percent while Nifty retreated 0.70 percent.

Top news of the day:

India’s second Moon mission – Chandrayaan 2 – is set to soft-land on the lunar surface in the wee hours of September 7.

The Delhi government has sought suggestions from people on steps to reduce pollution in the city during winters when stubble burning takes place in neighbouring states like Punjab and Haryana.

The central bank plans to offer new licenses to set up small finance banks and allow payments banks to also apply for licenses, people familiar with the development told .

The government is expected to soon announce measures for certain sectors, including gems and jewellery, to boost the country’s subdued exports, PTI reported.

Stocks in news:

Shares of Indiabulls Housing Finance fell 4.95 percent to Rs 425.75 on BSE after reports that a PIL was filed against the company and its promoters in Delhi High Court. The company said it will fight against the PIL.

Shares of Tech Mahindra ended the day 3.77 percent higher at Rs 721.55, a day after it said that it has expanded its strategic collaboration with AT&T to accelerate AT&T’s IT network application, shared systems modernization and movement to the cloud.

Capacite Infraprojects shares rose 3.37 percent to Rs 207.20 after it got a Rs 4,502-crore order from the City and Industrial Development Corporation of Maharashtra (CIDCO). The company has got a contract to build around 21,346 dwelling units with the development of the commercial area and onsite infrastructure works at Navi Mumbai.

Shares of J Kumar Infraprojects ended the day 3.39 percent higher at Rs 120.30 after the company said it will design and construct a coastal road from Amra Marg to MTHL junction, including the airport link at Navi Mumbai, for Rs 681.63 crore in the name of J Kumar-JM Mhatre (JV).

Shares of Axis Bank climbed 3.35 percent to Rs 671 after research house Nomura maintained buy call on the stock. The brokerage, however, cut the target price to Rs 875 from Rs 900 per share and moderated growth expectations by 1-2 percent that could lead to 4-5 percent cut in earnings.

Shares of Unichem Laboratories settled with a gain of 3.27 percent at Rs 175.50 after the US Food and Drug Administration (USFDA) concluded its inspection without any FDA form 483.

Shares of Power Finance Corporation (PFC) climbed 4.33 percent to Rs 108.50, while those of REC jumped 6.24 percent to Rs 150.70 after global brokerage house CLSA upgraded them from sell to buy. CLSA has raised the target prices for PFC to Rs 150 from Rs 120 and REC to Rs 180 from Rs 160 per share.

Shares of Prabhat Dairy surged 19.95 percent to Rs 78.15, a day after the company said it is mulling delisting from exchanges on September 10. The scrip was locked at the upper circuit.

Global updates:

European markets pulled back marginally from one-month highs, as German data showed an unexpected fall in industrial output and the impact of upbeat signals on US-China trade talks faded ahead of US jobs data later in the day, Reuters reported.

Asian markets ended with gains on September 6. Shanghai Composite index closed 0.46 percent up at 2,999.60, Nikkei gained 0.54 percent and Kospi rose 0.22 percent to 2,009.13.

Technical view on the market:

Nifty posted a negative close last week. After an indecisive session on Thursday, the index witnessed some recovery on Friday and entered the near term resistance zone of 10,920-10,950.

“The recovery can continue for a couple of sessions if the bulls manage to push harder. In that case, the index can stretch towards 11,050-11,100,” said Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas.

“The plausible move on the upside will be the last leg of a potential running triangular pattern post which the Nifty can resume the larger downtrend. On the flip side, failure to sustain above 10,950 would indicate the start of the next down leg right away. A crucial trend line support on the downside is near 10,800 below which, it may test the August low at 10,637,” he added.Get access to India’s fastest growing financial subscriptions service Pro for as little as Rs 599 for first year. Use the code “GETPRO”. Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the website or mobile app.