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Auto, capital goods stocks gain

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Firmness prevailed on the bourses in early afternoon trade led by index pivotals ICICI Bank, L&T and Reliance Industries. At 12:15 IST, the barometer index, the S&P BSE Sensex, was up 451.36 points or 1.37% at 33,470.43. The Nifty 50 index was up 147.30 points or 1.45% at 10,275.70. Strong global cues underpinned the sentiment on the domestic bourses. Traders and investors are awaiting the outcome of the Reserve Bank of India's (RBI) monetary policy meeting.

Auto stocks gained ahead of the outcome of the Reserve Bank of India's (RBI) monetary policy meeting. Capital goods stocks edged higher.

Domestic stocks saw a gap-up opening tracking firm Asian stocks. Key benchmark indices extended gains and hit fresh intraday high in morning trade. Key benchmark indices held firm in mid-morning trade.

 

The S&P BSE Mid-Cap index was up 1.52%. The S&P BSE Small-Cap index was up 1.62%. Both these indices outperformed the Sensex.

The broad market depicted strength. There were over three gainers against every loser on BSE. 1,920 shares rose and 518 shares fell. A total of 111 shares were unchanged.

Axis Bank rose 1.19%. In clarification to reports titled "RBI drops Axis Bank from list of bullion importers," Axis Bank said that the Reserve Bank of India had informed the bank that its request for renewal of the authorization for import of gold for the financial year 2018-19 cannot be acceded. This does not have material impact on the bank. The announcement was made after market hours yesterday, 4 April 2018.

Auto stocks gained ahead of the outcome of the Reserve Bank of India's (RBI) monetary policy meeting. Purchases of both residential and commercial property are largely driven by finance.

Tata Motors (up 4.55%), Maruti Suzuki India (up 0.92%), Mahindra & Mahindra (M&M) (up 2.85%), Eicher Motors (up 1.06%), Ashok Leyland (up 0.55%), Escorts (up 2.5%), Bajaj Auto (up 0.96%), Hero MotoCorp (up 1.63%) and TVS Motor Company (up 0.33%) gained.

Capital goods stocks edged higher. BEML (up 2.78%), Bharat Electronics (up 0.49%), ABB India (up 0.96%), Punj Lloyd (up 1.37%), Siemens (up 0.7%) and Thermax (up 0.06%) rose.

L&T advanced 2.06% after the company said that its construction arm L&T Construction has won orders worth Rs 3376 crore. The announcement was made during market hours today, 5 April 2018.

In a separate announcement made during trading hours today, 5 April 2018, L&T said that its wholly owned subsidiary, L&T Hydrocarbon Engineering (LTHE), announced an award for three gas production deck modules by Saudi Aramco. This is the fourth award for the consortium of LTHE with Subsea 7. There are three offshore contracts currently under execution by the Consortium for Saudi Aramco under the long term agreement.

Bharat Heavy Electricals (Bhel) rose 2% after the company said it commissioned 330-megawatts Kishanganga hydro-electric project in Jammu & Kashmir. With the commissioning of the third 110 megawatts (MW) hydro generating unit, Bhel has successfully commissioned the 330 MW Kishanganga hydro-electric project (HEP) in Jammu & Kashmir (J&K). The first and second units of the project were also recently commissioned in March 2018. Notably, all the three units of Kishanganga HEP have been commissioned within a short span of 18 days. The announcement was made after market hours yesterday, 4 April 2018.

Being developed by NHPC, the project is located on the river Kishanganga, a tributary of the river Jhelum, in Bandipora district of J&K. The 3x110 MW Kishanganga HEP will be able to generate 1,350 Million Units (MU) of clean electricity annually, facilitating reduction of greenhouse emissions.

Traders and investors are awaiting the outcome of the Reserve Bank of India's (RBI) monetary policy meeting. The RBI's two-day Monetary Policy Committee (MPC) meeting began yesterday, 4 April 2018 for the first bi-monthly monetary policy for 2018-2019. The resolution of the MPC will be announced at 14:30 IST today, 5 April 2018. As per reports, the central bank is likely to keep interest rates unchanged in the first monetary policy review of the current fiscal year, amid a gradual recovery in growth and easing inflation.

In its last meeting on 7 February 2018, RBI decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6%. Consequently, the reverse repo rate under the LAF was at 5.75%, and the marginal standing facility (MSF) rate and the bank rate at 6.25%.

India's services activity rebounded in March, driven by a marginal rise in new businesses, data released today, 5 April 2018 showed. The seasonally adjusted Nikkei India Services Business Activity Index rose to 50.3 in March from 47.8 in February. A reading above 50 indicates economic expansion, while a reading below 50 signals contraction.

Overseas, Asian shares were trading higher as optimism grew that the US and China will step back from the brink of a trade war. Representatives from China and the US left the door open for a negotiated solution to avoid tariff proposals that wouldn't take effect for months. Markets in mainland China, Hong Kong and Taiwan were closed for holidays.

China's tariffs would place 25% duties on major US exports to China including airplanes, autos and soybeans, covering 106 categories of products and affecting $50 billion of goods. The announcement followed plans by the Trump administration to impose tariffs of 25% on Chinese products worth $50 billion, on top of levies introduced on steel and aluminum last month. Retaliatory Chinese levies on US pork and fruit came into effect early this week.

US stocks closed sharply higher yesterday, 4 April 2018 amid heavy intraday volatility as investors turned their focus to earnings and away from a trade conflict between the United States and China.

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First Published: Apr 05 2018 | 12:15 PM IST

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