Nifty ends above 8,000 on buying in blue-chip stocks; ITC top gainer

The benchmark indices logged smart gains in Tuesday's session on the back of value buying in blue-chip stocks such as ITC, Tata Steel, Adani Ports, and ICICI Bank, rebounding from the seventh month lows tested in Monday's session. 

The S&P BSE Sensex rallied 406 points to end at 26,213, while Nifty50 reclaimed its crucial 8,000-mark to close 125 points higher. 

BSE Midcap outperformed the headline indices and added 1.7%, while BSE Smallcap finished 1.5% higher.

The market breadth, indicating the overall health of the market, remained strong. On the BSE, 1,692 shares rose and 875 shares fell. A total of 174 shares were unchanged.

"Market witnessed a broad-based relief rally, supported by Finance minister’s comment on competitive tax structure compared to Monday's interpretation of possible capital gains tax. The domestic market is expected to be volatile due to expiry week and as uncertainty still prevails over the extent of impact on earnings due to demonetization. Globally investor participation continue to be muted due to holiday mood and lack of any major triggers," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.

 

The market had declined in eight out of the previous nine sessions on worries about outflows from emerging markets to the United States and continued concerns about government's move to ban higher-value currency notes.

On Monday, the sentiment was further hit by worries that the government would impose higher taxes on investors, though some of the fears subsided after Finance Minister Arun Jaitley said there were no plans to raise long-term capital gains taxes.

Sectors and stocks

Index heavyweight and cigarette major ITC gained over 4% at Rs 234 and was the top Sensex gainer. 

BSE FMCG index (up 2.55%) was the leading sectoral gainer, led by gains in Godfrey Phillips India, Triveni Engineering and KRBL. Other sectoral gainers included BSE Metal, BSE Consumer Durables, and BSE Basic Materials.

Cigarette stocks led by Godfrey Phillips India were in focus gaining up to 20% on back of heavy volumes. Besides Godfrey Phillips India, ITC, VST Industries and Golden Tobacco added between 3% to 11% on the BSE. 

Divi’s Labs rose over 3% at Rs 789 after falling 34% in the previous three sessions amid concerns over USFDA’s observations on unit-II at Vishakhapatnam facility. 

Among losers, real estate companies ended weak with nine companies from the sector hitting their respective 52-week lows on the BSE.

Housing Development & Infrastructure (HDIL), D B Realty, Kolte-Patil Developers, Ansal Properties & Infrastructure, D S Kulkarni Developers, Nitesh Estates and Peninsula Land ended at their 52-week lows on the BSE.

Jet Airways hit 52-week low of Rs 332, down 3% on the BSE in intra-day trade, and closed 0.65% higher at Rs 343.
 

The stock underperformed the market so far in 2016 by falling 53% from Rs 702 at the beginning of the year as compared to 1.2% decline in the Sensex.

Global markets

European markets were trading flat, while Asian stocks closed mostly higher in thin trade and with little to guide them as most major markets were closed on Monday for Christmas holidays. Japan's Nikkei ended little changed, while China's CSI 300 index was down 0.1% and the Shanghai Composite slipped almost 0.2%.

(With inputs from Reuters)