Markets end marginally higher as investors take a breather after Budget

Auto stocks fell after reporting lower January sales, with the BSE Auto index falling over 1%

Benchmark indices were trading marginally higher as investors take a breather after Budget which helped markets gain nearly 2% in yesterday’s session. The Street also awaits RBI policy due next week.

Meanwhile, cautious sentiment ahead of European Central Bank and Bank of England policy meet capped the gains. 

Sensex was trading negative during the early morning trade but later pared losses to rise as much as 158 points.

 

The S&P BSE Sensex ended the day at 28,226, up 85 points, while the Nifty50 settled at 8,734, up 18 points.

 

In the broader market, the BSE Midcap index and BSE Smallcap index outperformed the headline indices to rise 0.9% and 1% respectively.

"Weak auto sales put early upmoves under check, but budget rally’s momentum was strong enough hold market together and push indices to the highest level this year. It also helped that IT stocks, which were under pressure owing to US immigration woes, swung back sharply lending positivity. RBI rate decision next week is also back in focus, with FOMC maintaining status quo, and government pursing fiscal consolidation giving room for RBI to consider further easing,” said Anand James, Chief Market Strategist, Geojit BNP Paribas Financial Services in a note.

 

Sectors and Stocks

 

Auto stocks dropped on Thursday after reporting lower January sales, with the BSE Auto index falling over 1%.

 

Tata Motors fell 2% after the auto major posted a 1% fall in total sales in January at 46,349 units compared to 47,035 units in the same month last year.  M&M, Bajaj Auto and Hero Moto Corp also fell 1.7%-2.8% on January auto sales.

 

Infosys rebounded today, gaining 2% after losses in previous two consecutive sessions due to H1-B visa woes.

 

Shares of oil & gas stocks gained up to 2% after Jaitley announced to create integrated public sector oil major to enhance their capacity to bear higher risks. Reacting to the development, the BSE oil & gas index rose as much as 1.5% to 13223 in an otherwise flat market. The index ended 0.5% higher.

 

De Reddy’s Sun Pharma, Bharti Airtel, Coal India and Infosys were the top movers on Sensex.

 

ITC has moved higher to its lifetime high of Rs 280, up 4% in early morning trade, extending its previous days nearly 5% rally on the BSE, after a lower than expected hike in excise duty on cigarettes in Budget. The stock ended 1.6% up.

 

Also, ITC, the fast moving consumer goods (FMCG) giant has surpasses the HDFC Bank, the country’s largest private-sector lender in overall market capitalization (m-cap) ranking.

 

Global Markets

 

Asian shares touched four-month highs while the dollar sagged on Thursday after the US Federal Reserve stuck to its mildly upbeat economic view but gave no hint of accelerating rate hikes.

 

European shares fell on Thursday after disappointing company updates. The pan-European STOXX 600 index fell 0.3% by 0812 GMT after gaining 0.9% in the previous session.

 

While strong economic data from the United States and elsewhere has underpinned risk assets, uncertainty and concerns over US President Donald Trump's policies have put global markets on edge.

 

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.15% after touching its highest level since mid-October, with Seoul shares reaching highs last seen in July 2015.

 

But gains were not broad-based, with Hong Kong's Hang Seng slipping 0.6% and Singapore down 0.8%.

 

Japan's Nikkei lost 1% on a stronger yen.