Monday, 1 September 2014

Sensex ends 229 pts up, Nifty scales 8000; banks, oil rock

4:30 PM: Sensex ends 229 pts up, Nifty scales 8000; banks, oil rock

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It was a sparkling start to the September series on Monday with the 50-share NSE Nifty closing above the 8000-level for first time on rebound in GDP in June quarter. Hopes of achieving FY15 fiscal deficit target on the back of lower diesel under-recovery also supported the market.

The Sensex rose 229.44 points to end at new closing high of 26867.55 and the Nifty rallied 73.35 points to 8027.70 aided by banks, oil & gas, metals and auto (select) stocks. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.57 percent and 1.3 percent, respectively.

Experts have high hope that the Nifty may start trading in five digits before the next Union Budget gets announced. They feel the earnings may be doubled by end of FY20. However, the only risk they see is global cues.

On the economic data front, gross domestic product in April-June quarter grew at 5.7 percent, the highest since the fourth quarter of financial year 2011-12, as against 4.7 percent in the year-ago period driven by manufacturing, mining and construction sectors.

The HSBC India Purchasing Managers’Index (PMI) dipped slightly from July’s 17-month high of 53.0 to 52.4 in August due to fall in output and new domestic orders but the data highlighted a tenth consecutive monthly improvement in operating conditions in August. Input cost pressures eased slightly following the acceleration seen in July.

The real stars of the day were auto and oil stocks. India’s largest car maker Maruti Suzuki reported a 27 percent year-on-year growth in August sales driven by compact cars like Ritz, Dzire, Swift, Celerio. The stock ended at new closing high of Rs 2915.50, up 4.7 percent.

Second largest commercial vehicle maker Ashok Leyland gained 6 percent post 17 percent growth Y-o-Y in August sales basis while Eicher Motors rose over 3 percent on 66 percent growth in sales led by Royal Enfield.

Two-wheeler maker Hero Motocorp topped the buying list in the Sensex, up 5.8 percent while top commercial vehicle maker Tata Motors fell 0.9 percent ahead of August sales numbers.

Oil marketing companies like HPCL, BPCL and IOC rallied 1-6 percent after the government said the diesel under-recovery in September 1-15 will be seen at Rs 0.08 per litre as against Rs 1.78 per lire in second fortnight of August.

India Ratings and Research believes that the staggered diesel price hike since end October 2012 has paved the way for diesel price decontrol and that now is the right time for the government to decontrol diesel price and allow oil marketing companies (OMCs) to price diesel according to global rates. This will help the government achieve its fiscal consolidation targets, it added.

Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1930 to 1001.

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