Sensex up nearly 300 points; metal shares rally

Benchmark indices continue to trade firm with Nifty reclaiming 8,700 mark on fresh capital infusion by investors owing to strong global cues. A weaker than expected US manufacturing data dampened the hopes of an early rate hike by the Federal Reserve which in turn lifted the sentiments of the market participants.

Bank of America-Merrill Lynch (BofA-ML) said on Tuesday that the Sensex is likely to touch 54,000 by end-2018, but will be rangebound-to-negative over the next few months, Reuters reported.

At 11.45 AM, the 30-share Sensex is up 286 points at 28,724 and the 50-share Nifty has gained 86 points at 8,719.

RUPEE

The rupee gained 9 paise to 62.72 against the dollar in early trade on Tuesday at the Interbank Foreign Exchange on increased selling of the American currency by banks and exporters amid lower dollar value overseas on tepid US manufacturing data.

CRUDE

Brent crude oil prices reversed most of their early gains to steady below $54 per barrel on Tuesday as high ongoing oversupply dragged on the market.

KEY STOCKS

On the sectoral front,  all sectoral indices are trading firm with BSE FMCG, Consumer Durables, Capital Goods, Power, Auto and Bankex up between 1-2%.

Metal shares are gaining on prospect of further stimulus measures from China which may raise hopes of a boost in demand in the biggest consumer. Hindalco, Sesa Sterlite, Tata Steel are up between 2.5-5%.

Shares of Tata Motors are trading higher by 3% on expectations of a revival in the demand for commercial vehicles.

Sun Pharmaceuticals Industries, the pharmaceutical giant has surpassed the State Bank of India (SBI), the country’s largest public-sector lender in overall market capitalization (m-cap) ranking. The stock is up nearly 2%.  Among its peers, Cipla and Dr Reddy’s lab have gained up to 3%.

Banks have shown healthy growth in their advance tax deposit this quarter, with the highest payer, State Bank of India, depositing Rs 1,750 crore, 20 per cent higher than in the corresponding period of the previous year.

According to sources, ICICI Bank and YES Bank have shown 32 per cent and 30 per cent jump in their tax deposit to Rs 1,295 and Rs 260 crore, respectively, in the quarter. Advance tax numbers are significant, as they are used by analysts to reverse-calculate profit before taxes.

Axis Bank, HDFC Bank, ICICI Bank and SBI are trading higher up to 2%.

After the passage of the insurance Bill, Indian promoters of life insurance companies are expected to see inflows of around Rs 50,000 crore through stake sale to foreign partners or other financial intermediaries and issue of more shares. Kotak Institutional Equities, in a recent report, says the top five life insurance companies – Bajaj Allianz, HDFC Standard Life, ICICI Prudential, Max Life and SBI Life – stand to make capital gains of Rs 20,000 crore if they pare their stake to 51 per cent, without issuing more shares. The report said that improving 'Annual Premium Equivalent' (APE) flows on strong capital markets will boost Embedded Value (EV) growth, driving valuations of insurance companies (and capital gains for their parent). Shares of HDFC are trading higher by 2%.

A strong rupee has casted its shadow on the IT pack. Infosys is down 0.6% while Wipro is trading with marginal gains.

Having failed to attract any Japanese or Korean shipbuilders to build LNG vessels in India, PSU firm GAIL (India) would reissue the multi-billion dollar tender with “changed norms”. The gas marketing and trading company was forced by the government to buy one-third of LNG ships, required to ferry gas from the US starting 2017, from Indian manufacturers, according to media reports. GAIL is down 0.5%.

Selling is evident in the telecom major Bharti Airtel. The stock is down over 1% and has emerged as the top loser.

In the broader market, the BSE Mid-cap and Small-cap are up over 1% each.

Market breadth is strong with 1,485 gainers and 869 losers on the BSE.