Nifty ends above 8,000; M&M, Bajaj Auto up 2%

Markets ended higher led by index heavyweights even as auto shares were the top gainers

Benchmark share indices ended higher on Monday, shrugging off weak European cues, amid buying in index heavyweights even as auto shares emerged as the top gainers.

The 30-share Sensex ended up 161 points at 26,587 and the 50-share Nifty ended up 31 points at 8014.

In the broader market, the BSE Mid-cap ended down 0.2% and the Small-cap index gained 0.3%. Market breadth was firm with 1,427 gainers and 1,223 losers on the BSE.

"Markets are seeing value buying at lower levels on the back of improved macros with encouraging April IIP numbers. Further, the contraction in WPI will eventually ease out going forward," said Prakash Diwan, director, Altamount Capital Management. 

Meanwhile, the rupee was trading marginally lower at 64.09 to the US dollar compared to its previous close of 64.06.

ECONOMIC TRENDS

The wholesale price index (WPI) contracted to 2.36% in May versus -2.65% in the previous month on the back of dropping oil and manufacturing goods prices.

Index of Industrial Production (IIP) increased by 4.1% in April, against a growth of 2.8% a year ago and 2.5% in March this year on the back of 5.1% growth in manufacturing and 11.1% expansion in capital goods. The manufacturing sector contributes 75% to the index. Consumer Price Index (CPI) rose from 4.87% in April to 5.01 in May on the back a poor monsoon.

“The recent rise in international commodity prices has also started to reflect in the WPI index as non-food prices moved up by a strong 5.1%, manufacturing items by 0.20% and energy prices by 3.04% over the last month. Going forward, monsoon rains would be crucial as there could be short term spikes in food inflation in the event of insufficient rainfall. Overall, WPI inflation should move into positive territory in the second half of the year once the positive base effect fades away.” says Rishi Shah, economist, Deloitte.

SECTORS & STOCKS

The BSE Auto index was the top gainer up 1% followed by Healthcare, Oil and Gas amongo others.

Mahindra & Mahindra ended up 2.4%. The auto major is set to launch a new light commercial vehicle named Jeeto by the end of this month to take on homegrown rival Tata's popular minitruck Ace Zip.

Tata Motors gained 1% after reporting data on global wholesale volumes for May 2015. Tata Motors' group global wholesales, including Jaguar Land Rover, rose 2.15% to Rs 79,244 units in May 2015 over May 2014. Among other stocks, Bajaj Auto and Maruti Suzuki ended up 0.7-2.3% each.

ONGC rose 1.2%. The Tripura unit of ONGC has introduced highly technical Hydro-fracturing (HF) job procedure to intensify exploration of natural gas for supply in different projects of the state.

Shares of Relinace Industries continue its Friday’s rally and ended up 1.2% after Mukesh Ambani in the 41st AGM said that RIL will commence launch Reliance Jio in December and will cover the entire population in a span of three years. He added that Reliance has made an investment worth Rs 1 trllion last year and plans to expand his retail business.

Shares of capital goods companies gained on encouraging April IIP data. Larsen and Toubro (L&T), Siemens, Alstom T&D ended up between 1-2% on the BSE.

Vedanta on Sunday said it would merge its subsidiary Cairn India with itself for a larger natural resource play. Each Cairn India shareholder would be offered an equity share of Vedanta , besides a 7.5% redeemable preference share of Rs 10 face value. Vedanta ended down 1.7% while Cairn India gained 3.2%.

Public-sector banks have put Rs 14,000 crore worth of non-performing assets (NPAs) up for sale, to ease some pressure exerted by stressed loans on their balance sheets. Among public sector banks, SBI, Punjab National Bank, Bank of India, Punjab & Sind Bank ended lower up to 2% each.

IT shares ended with marginal gains after losses last week after US government opened an investigation against two of the Indian IT outsourcing companies for possible violations of H1-B visa rules. Infosys, Wipro and TCS ended up 0.2-0.9% each.