Bumper rally continued for third consecutive session Thursday, taking the Nifty to one-month closing high on value buying post Union Budget. Today’s rally could be on the back of hopes of NDA government getting some important bills (like GST) passed in parliament.
The 30-share BSE Sensex rallied 364.01 points or 1.50 percent to 24606.99, taking total to 1605-point of addition in three sessions. The 50-share NSE Nifty inched closer to 7500 level, which seems to be near term resistance for current rally, feels experts. The index closed at one month high today, up 106.75 points or 1.45 percent at 7475.60 despite weak global cues.
Despite the market rally, witnessed this week, Sandip Bhatia of Macquarie Securities Group says Indian market is in a recovery phase and will take two to three years to bounce back fully. “Another correction cannot be ruled out,” he adds.
Timothy Moe of Goldman Sachs has maintained overweight rating on India, though it slashed 12-month Nifty target from 8600 to 8200.
The BSE Midcap index underperformed benchmarks, up 0.6 percent and Smallcap rallied 1.35 percent. The market breadth remained positive as about two shares advanced for every share falling on the Bombay Stock Exchange.
Meanwhile, Prime Minister Narendra Modi (while speaking on Motion of Thanks in Lok Sabha) has urged opposition parties to help in passing Goods & Service Tax Bill in parliament, which has been stuck for long.
Infra, healthcare, technology, metals, auto and select banks stocks led benchmarks higher.
Metals topped buying list among sectoral indices with the Nifty Metal surging 5 percent. Vedanta and Tata Steel climbed more than 7 percent. Hindalco Industries gained 6 percent.
Tata Motors was the second leading contributor to Sensex’s rally, up 6 percent after Jaguar Land Rover sales increased 25.3 percent year-on-year to 7,929 units in February, majorly supported by Land Rover that grew by 30.5 percent to 6,417 units. Nomura retained buy on the stock with a target price of Rs 405.
Reliance Industries and ONGC gained 1 percent each after a media report indicated that the government is planning to raise natural gas price by about 60 percent for their undeveloped gas discoveries in difficult areas.
ONGC, Gujarat State Petroleum Corporation and Reliance will be huge beneficiaries if the government hikes gas prices by 60 percent, says RS Sharma, Former Chairman of ONGC. He believes USD 6 million British Thermal Units (MBTU) is viable for deep waters oil wells.
Dr Reddy’s Labs jumped nearly 6 percent on approval from the US Food & Drug Administration for Palonosetron hydrochloride injection, anti-nausea drug.
Infosys climbed over a percent as Morgan Stanley maintained overweight rating on the stock. “Infosys management reiterated their outlook of achieving industry leading revenue growth in FY17 and believes that growth is not coming at the expense of margins. Its philosophy of “consistent profitable growth” remains unchanged and automation should start reflecting in better margins over the medium term,” says the brokerage.
Maruti Suzuki ended flat despite the company decided to hike car prices in range of Rs 1,441-34,494, which is not for hybrid models.
Among others, L&T was the leading contributor to Sensex with 6 percent gains. Even its rival state-owned power equipment maker BHEL gained 6 percent.
HDFC, TCS, Sun Pharma, Adani Ports, Axis Bank, Bharti Airtel and GAIL rose 2-6 percent while ICICI Bank (down 1 percent) and ITC (down 0.75 percent) saw profit booking.
On the global front, European markets were trading flat. Asian markets too ended mixed with Nikkei rising 1.4 percent.