Markets shrug off July IIP, rate sensitives lead

Auto, Bankex, Realty and IT shares among top gainers

Benchmark share indices firmed up further, shrugging off July IIP data which came in at 0.1%, led by rate sensitive shares on hopes of a rate cut by the central bank at its policy meet on Monday.

At 11:26 the 30-share Sensex advanced 55 points at 17,908 and the Nifty added 13 points at 5,403. The Sensex had touched 17,938 and the Nifty had touched 5,413 post the announcement of July IIP data.

The rupee rose by 10 paise to 55.24 against the dollar in late morning deals as the American unit weakened against euro and other currencies overseas.Forex dealers said euro's gain against the dollar ahead of a German court ruling on the euro zone's bailout fund and a higher opening in the equity market supported the rupee.

Asian shares edged higher on Wednesday as investors remained cautiously optimistic a German court would approve the legality of the euro zone's bailout fund later in the day and the U.S. Federal Reserve may deliver further stimulus measures this week. Hang Seng and Nikkei were up over 1% each while the Shanghai Composite was marginally down on profit taking.

Among the sectoral indices, Rate sensitive sectors such as Auto, Realty and Bankex were the top gainers followed by IT.

Tata Motors was up nearly 3% after the company said it is evaluating options for setting up a manufacturing base in Indonesia to serve the country and the ASEAN region. Other gainers include, Bajaj Auto and Maruti Suzuki.

In the banking space, ICICI Bank, HDFC Bank and SBI were up 0.5-1.3% each on hopes that cut in key policy rates by the central bank would boost credit growth going forward.

Realty shares were up on hopes that lower interest rates will boost home loan growth. Godrej Properties was up 1.6% after it launched its second project in Gurgaon on Tuesday– the 21 acres ‘Godrej Summit’. Other gainers include DLF and Indiabulls Real Estate.

Software majors firmed up ahead of the two-day US Federal Reserve meet which could announce stimulus measures to boost the sagging US economy. Software majors earn most of their revenues from exports to the US. TCS and Wipro were up over 1% each while Infosys was trading with marginal gains.

The market breadth was very positive due to the strength in the broader markets. 1448 stocks advanced while 983 stocks declined on the BSE.