Markets extend gains; Metal and IT shares rally

Benchmark indices regained momentum after trimming some gains following the correction in ITC shares and are set to close with record highs for second consecutive day with information technology, financials and heavyweights shares leading the rally.
 
At 2:30 PM , the 30-share Sensex is up 408 points at 27,754 and the 50-share Nifty has gained 117 points at 8,285.
 
In the broader market, both BSE Mid cap and Small cap indices have gained more than 1%.
 

The market breadth is positive with 1,762 gainers against 1,110 losers.
 
Further, Maruti Suzuki India, the country’s largest carmaker and Axis Bank, the third largest private bank, have joined the elite club of companies with market capitalisation (m-cap) of more than Rs 1 lakh crore. With the addition of Axis Bank and Maruti Suzuki India, total companies having m-cap of more than Rs 1 lakh crore now has 20 members.

 
 
Meanwhile, Bank of Japan (BoJ) has expanded its bond purchasing program from 50 trillion Yens to 80 trillion Yens which led to a 4% surge in Nikkei.  BOJ has announced to maintain its expansionary monetary policy stance till the Japanese economy reaches at least 2% inflation rate.
 
Global markets
 
Along with the surprise dose of quantitative easing from BoJ, Japanese shares have also gained on reports that a Japanese government panel overseeing the Government Pension Investment Fund (GPIF) has approved plans for the fund to raise its holding of domestic stocks to 25% of its portfolio from the current 12%. Nikkei has gained close to 5%.

 
Chinese shares have gained on hopes of further support measures for the economy from the government. The Shanghai Composite and Hang Seng indices have gained around 1.2% each.
 
European markets have opened upbeat on BoJ surprise move to substantially expand its bond buying program which is likely to increase liquidity in the global equity market. FTSE is up around 0.8% while DAX has gained the most at 1.3% and CAC 40 index is up around 1%.
 
 
Sectors and stocks
 
BSE Metal and Capital Goods indices have gained close to 2% followed by BSE Oil & Gas and IT indices. BSE FMCG index has gained the least at 0.1% as ITC trimmed its gains following the release of its second quarter results. BSE Consumer Durable index alone is down around 2.7% dragged by Titan shares which have lost close to 6% after reporting a lower than expected performance in the July-September quarter.

Among metal shares, Tata Steel has gained the most at 3.3% followed by Hindalco at 1.5% and Sesa Sterlite at 1.2%.
 
 
Among Sensex heavyweights, HDFC has gained the most at around 3.6% while L&T has gained close to 3%.
 
 
IT stocks have gained on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Infosys is among the biggest gainer with an advance of around 2% followed by TCS at around 1.5% and Wipro gaining around 1%.
 
Among bank shares, SBI is among the biggest gainer with an advance around 2% followed by HDFC Bank at 1.7%, Axis Bank at 1.6% while ICICI Bank is flat.  

 
IDFC Limited has gained above 5% after receiving its board's approval to demerge its financial undertaking into its wholly-owned step down subsidiary IDFC Bank Ltd, as per a stock market disclosure.
 
Among oil & gas shares, ONGC has gained around 1.6% while Reliance has gained around 1.2% while GAIL is up around 0.5%. ONGC and GAIL are set to benefit  after the government decided to abolish the policy in effect since 1984 which required  public sector oil & gas companies to give preference to domestic vendors  even if their bids were higher upto 10% than their foreign competitors. Since the abolition of Administered Pricing Mechanism (APM) the additional costs were being absorbed by state owned oil & gas companies.

 
ITC has rebounded after its shares declined on the release of its second quarter earnings and is currently trading flat. ITC matched street expectations with the second quarter net profit climbing 8.7%  year-on-year to Rs 2,425 crore supported by other income and higher revenue. The profit in the year-ago period was Rs 2,230.5 crore.
 
Among auto shares, Maruti Suzuki has gained around 2.8% as a series of new launches are expected to firm up sales for the company.

Bharti Airtel has lost around 1.6%  as its performance in the September quarter has been rather muted, as the African market continues to be a drag. Seasonally, the second quarter is known to be weak for the company, but the contraction in voice revenues and realisations has been far more pronounced.

 
Shares of real estate and infrastructure companies are continue trading higher by up to 20%, extending their previous day’s rally, on the news that the government had relaxed foreign direct investment (FDI) rules in the construction sector by reducing minimum built up area as well as capital requirement and easing exit norms.