Financials & auto shares rally in range-bound market

Bajaj Auto, M&M, Maruti Suzuki, Hero Moto and Tata Motors have gained between 0.4-3%

Benchmark indices are trading in a tight range with positive bias led by financials and auto shares. Firm opening of the European markets has also helped the markets to hold on to their gains.

At 14:35 PM, the 30-share Sensex was up 45 points at 26,359 and the 50-share Nifty was up 13 points at 7,888.

The broader markets are outperforming the benchmark indices- BSE Midcap and Smallcap indices are up by nearly 0.5% each. 

Foreign portfolio investors (FPIs) bought shares worth a net Rs 251.36 crore on Wednesday, as per provisional data from the stock exchanges.

GLOBAL MARKETS

Japanese stocks rose to a three-week high on Thursday, posting gains for the ninth consecutive day, as a weaker yen shored up exporters after minutes of the U.S. Federal Reserve's July meeting raised the risk of an earlier rate hike.

The Nikkei share average climbed 0.9% to 15,586.20 points, its highest closing level since July 31. The nine-day winning streak was the longest since December.

The broader Topix added 0.9% to 1,291.19, and the new JPX-Nikkei Index 400 gained 0.9% to 11,752.54.

INDIAN RUPEE

The rupee is trading at 60.77/78 versus its close of 60.61/62 on Wednesday.

The US dollar is trading at 11-month highs against a basket of major currencies after minutes of the Federal Reserve's July meeting sounded slightly hawkish.

SECTORS & STOCKS

BSE Consumer Durables index has surged by over 3% followed by counters like Banks, Capital Goods, Auto and Healthcare, all gaining by nearly 1% each. However, BSE Metal, Realty and Power indices have declined by 1% each.

The BSE Consumer Durables Index was the top gainer among the sectoral indices up over 3% at 9,103 after touching an intra-day high of 9,169.

After the sharp rally in other sectors such as auto, bank, pharma, capital goods and IT investors are now turning focus to customer discretionary shares.

Titan was the top gainer up 6% after a foreign brokerage upgraded the stock to overweight and raised the target price. The company expects improvement in margins led by the jewellery business under the Tanishq brand.

Other gainers in the Consumer Durables index include, Bajaj Electricals, VIP Industries, Rajesh Exports, Blue Star up 2-3% each.

Auto shares extended gains on hopes that sales growth in the forthcoming months ahead of the season is likely to be encouraging. Apart from upbeat first quarter results, better-than-expected bookings for new models launched also helped boost sentiment. Bajaj Auto, M&M, Maruti Suzuki, Hero Moto and Tata Motors have gained between 0.4-3%.

Among banks, SBI, ICICI Bank, Axis Bank and ICICI Bank have gained between 0.3-2.5%. Finance Minister Arun Jaitley today said incidents unfair practices in public sector banks were disturbing, but expressed hope that such cases were not large in number.

Other notable gainers are Sun Pharma, Cipla, L&T, ITC and GAIL.

Shares of metal companies are trading lower up to 2% in otherwise firm market after the Union Cabinet on Wednesday decided to raise the mining royalty rates. This should lead to an increase in input prices for all mineral-based industry.

Tata Steel, Sesa Sterlite, JSW Steel, Steel Authority of India (SAIL) and NMDC are down 1-2% on the National Stock Exchange (NSE).

Other prominent losers from the Sensex-30 pack are NTPC, Dr Reddy’s Labs, Tata Power, Bharti Airtel and HDFC.