Auto, IT shares pull Nifty higher to end above 8,500

Markets finished the session on a higher note after Moody said yesterday that the Reserve Bank of India may possibly cut interest rates in its next monetary policy review due next month despite retail inflation surging to an eight-month high in June. 

The rally was helped by strong buying in auto and IT shares with Maruti Suzuki leading the rally after CLSA increased its target price on the stock.

Provisionally, the Sensex ended at 28,185 levels up252 points and the Nifty surged 72 points to close at 8,526 mark.

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(updated at 2:20 PM)
The markets are continuing their rally this afternoon, aided by the largely positive cues from the Asian front. The statement by rating agency Moody on Tuessday that the Reserve Bank of India may possibly cut interest rates in its next monetary policy review due next month and the historic nuclear deal between Iran and global powers seem to have further bolstered the sentiment on Dalal Street.

At 2:20pm, the Sensex was comfortably above the 28,000 mark at 28,195, up 262 points or 0.9% and Nifty had reclaimed the 8,500 mark at 8,524, up 70 points.

The midcap index has surrendered its intra-day gains and turned sluggish at 11,051, while the smallcap index is at 11,584, up 0.5%.

Investors would be keenly watching at the US Fed Chief Janet Yellen's two-day testimony before the US Congress and voting on reform measures by the Greek parliament, both scheduled later in the day.

RUPEE

The rupee has strengthened by 4 paise to 63.35 against the US dollar in early trade today at the Interbank Foreign Exchange on selling of the dollar by exporters. A fall in dollar against major world currencies globally helped strengthen the domestic currency, dealers said.

OIL

Oil prices rose in Asia on easing concerns about the impact of Iranian supplies on the global market following the country's historic nuclear deal. US benchmark West Texas Intermediate for August delivery rose 26 cents to USD 53.29 and Brent crude for August climbed 10 cents to USD 58.61 a barrel. Oil prices had sunk on Tuesday after the deal between Iran and major world powers led to fears that supply from Iran would add to the glut in global oil markets.

ASIAN MARKETS

The Nikkei index edged up 0.38% to 20,463 and Seoul gained 0.6% to end at 2,072. The Straits Times, Seoul and Se Composite indices also eked modest gains. However, the Shanghai sank 3%, as the stock market recovery that began in China last week after a slew of government steps to halt a crash ran abruptly out of steam on Wednesday. And the Hang Seng lost 0.3%. The European markets are however flat i early trades.

SECTORS & STOCKS

All the sectoral indices are trading in the green, with the IT and auto indices gaining more than 1% in noon trades.

IT shares are having a strong session on hopes of order inflows from Europe post the Greek bailout deal. Wipro, TCS and Infosys have gained between 1-2% each. Auto stocks are also seeing buying interest in noon trades. Maruti Suzuki has risen nearly 3% to a life-time high of Rs 4158, extending its nearly 3% gains in the past two trading sessions on the BSE, on expectations of strong financial results for the quarter ended June 30, 2015 (Q1). Tata Motors has also bounced back in this session due to value buying; the stock had touched fresh 52-week lows in the previous session on concerns about a slowdown in China.

RESULT IMPACT

DCB Bank has dipped 5.3% to Rs 134, extending its previous day’s 3.8% fall on the BSE, as asset quality of the bank worsened in April-June 2015 (Q1FY16) quarter. The bank’s gross non-performing assets (NPA) rose to 1.96% in June quarter from 1.76% in March quarter and 1.78% in the year-ago period.

Zee Entertainment is trading higher by less than 1% at Rs 378, declining nearly 2% from intra-day highs on the BSE, after the company said that operating profit margins for the June quarter stood at 23.2%. It was 29.29% in the previous year's corresponding quarter.

The market breadth is strong. Out of 2,866 stocks traded on the BSE, there are 1,536 advancing stocks as against 1,198 declines.