Markets end higher on rate cut hopes; Tata Motors up 3%

Rate sensitive sectors were among the top gainers with Tata Motors and ICICI Bank leading the gains on the Sensex

Markets gained for the second straight session after comments from RBI governor raised hopes of a rate cut while caution was seen in late trades ahead of the consumer price inflation data later today.

The S&P BSE Sensex ended up 86 points at 24,804 and the Nifty50 closed 28 points higher at 7,539.

In the broader markets, the BSE Midcap and Smallcap indices ended up 0.3%-0.4% each. Market breadth was marginally negative with 1318 gainers and 1337 losers on the BSE.

"Markets are seeing positive interest coming in based on the developments last week with a host of Bills passed last week. Further, global stability has also added to the sentiment," says Kunj Bansal, ED & CIO, Centrum Wealth Management.

RBI governor Raghuram Rajan said that the headline fiscal deficit target for the next financial year (at 3.5%) is a comfort for the central bank.

The Indian rupee pared early gains and was trading marginally higher at Rs 67.04 to the US dollar compared to Friday's close of Rs 67.05.

ECONOMY

Index of Industrial Production (IIP) for January stood at -1.5 contracting for the third straight month weighed down by manufacturing data, which dropped to -2.8% against -2.4% month-on-month (MoM). Also, the April-January IIP data has slipped to 2.7% against 3.1% (YoY).

India's annual wholesale inflation eased marginally to (-)0.91% for February, from (-)0.90% in the previous month, but was higher than the (-)2.17% level in the like month of the previous year, official data showed on Monday.

SECTORS & STOCKS

BSE Bankex was the top gainer up nearly 1% followed by the Auto index gained 0.6% among others. BSE Metal index was the top loser down 2%.

Tata Motors surge 3% after the auto major reported 17% year-on-year increase in group global wholesales, including that of Jaguar Land Rover (JLR) vehicles, at 98,842 units in February 2016. The company had sold 83,951 units in February 2016.

Coal India slumped 7% after the stock was quoted ex-dividend for Rs 27.40 per share today. Among other metal shares, Jindal Steel ended down 4.9%, SAIL eased 0.8% while  Vedanta and Hindalco were up 1.6%-1.9% each.

NMDC gained nearly 2% after India's largest iron ore miner has raised iron ore prices by Rs 70-150 a tonne for this month, effective last Friday.

Banks gained on hopes of a rate cut led by ICICI Bank which jumped nearly 4%. Axis bank, and SBI gained between 0.8% and 1.2% each.

Oil exploration majors such as ONGC and Cairn India ended up 1.4%-3% each on the back of stability in the crude oil prices.

Among other shares,  SpiceJet ended down 4.5%. On Friday the Delhi High Court asked SpiceJet to pass a board resolution for issuing share warrants to Maran and Kal Airways according to the sale agreement of 2015 which led to change in ownership of the carrier, a Business Standard report suggests.

Glenmark Pharmaceuticals gained 1.1% after the pharma major said that it has received the final nod from the US FDA to manufacture and market therapeutical equivalent of Endo Pharmaceutical's Frova tablets, used to treat migraine headaches, in the American market.

Dwarikesh Sugar Industries jumped 9.5%, extending its past two weeks rally on the BSE, after the rating agency ICRA upgraded the long-term rating of the Line of Credit (LOC). The outlook on the long term rating has been changed to positive from stable.