Broad market depicts strength

Stocks trimmed gain in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was up 174.94 points or 0.55% at 31,766.97. The Nifty 50 index was up 68.25 points or 0.69% at 9,956.95. Auto stocks gained. IT stocks gained as the rupee weakened against the dollar. Positive Asian stocks boosted sentiment on the domestic bourses.

Domestic stocks edged higher in early trade on positive Asian stocks. Key benchmark indices extended early gains and hit fresh intraday high in morning trade. Indices held firm in mid-morning trade.

The S&P BSE Mid-Cap index was up 0.83%. The S&P BSE Small-Cap index was up 1.08%. Both these indices outperformed the Sensex.

The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,704 shares rose and 708 shares fell. A total of 104 shares were unchanged.

Auto stocks gained. Escorts (up 2.94%), Eicher Motors (up 1.26%), Ashok Leyland (up 1.35%), Maruti Suzuki India (up 0.72%), Mahindra & Mahindra (M&M) (up 0.81%), Bajaj Auto (up 0.55%) and TVS Motor Company (up 1.48%) gained. Hero MotoCorp (down 0.36%) fell.

Tata Motors rose 0.23% after wholly owned subsidiary Jaguar Land Rover (UK) reported good sales in September 2017. Retail sales for Jaguar Land Rover rose 6.6% to 65,097 vehicles in September 2017 over September 2016, primarily reflecting continued solid sales of the F-PACE as well as the introduction of the Range Rover Velar, Jaguar XF Sportbrake and long wheel base Jaguar XFL in China. The announcement was made during market hours today, 6 October 2017.

IT stocks gained as the rupee weakened against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Infosys (up 1.75%), Wipro (up 0.85%), HCL Technologies (up 1.35%), TCS (up 0.67%), Tech Mahindra (up 0.1%), MindTree (up 0.78%), Hexaware Technologies (up 0.76%) and MphasiS (up 0.52%) rose. Oracle Financial Services Software (down 0.4%) fell.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 65.2325, compared with closing of 65.15 during the previous trading session.

Majestic Auto rose 3.89% after the company said it has shut down its fine blanking division which was a part of its manufacturing business vertical, due to unviable business operations viz. lack of viable orders & profitability. The announcement was made after market hours yesterday, 5 October 2017.

BASF India jumped 14.61% to Rs 1,685.85 on reports that a domestic brokerage firm initiated coverage on the stock with a 'buy' rating and a target price of Rs 2,212. According to reports, the brokerage that substantial capital expenditure by BASF India will now reduce its reliance on imports. BASF India is poised to demonstrate strong recovery in net profit and return ratios. Manufacturing and new product launches is expected to drive growth.

Overseas, Asian stocks followed their US counterparts higher after a slew of data and comments from Federal Reserve officials helped ratchet up bets that the US economy is strong enough to withstand higher interest rates. Stock markets in China and South Korea remained closed.

US stock-market indexes posted solid gains and closed at all-time highs yesterday, 5 October 2017 fueled by gains in technology stocks including Netflix, Microsoft and Amazon.com. After a House vote, the Senate approved a budget bill yesterday, 5 October 2017. Republicans passed tax cuts through what is known as budget reconciliation, which requires just a simple majority in the Senate. Republicans currently control the Senate with 52 seats.

Meanwhile, economic data released yesterday, 5 October 2017 pointed to underlying strength in the economy despite weather-related disruptions, with the trade deficit narrowing in August and jobless claims falling more than expected last week. The US trade deficit dropped 2.7% in August to $42.4 billion from $43.6 billion in July. Separately, initial jobless claims, a tool to measure US layoffs, fell by 12,000 to 260,000 at the end of September. The number of people already collecting unemployment benefits, known as continuing claims, fell slightly to 1.94 million.

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