Sensex reclaims 27,000, Nifty 8,300 ahead of Trump's first presser

Published on By prameya news7 (author)

NEW DELHI: Benchmark indices continued trading higher tracking Asian markets, which were trading at 2-month high as investors awaited cues from President-elect Donald Trump's first presser due later in the day.

 At 10:21 am, the Sensex was trading at 27,051, up 152 points, and the Nifty was ruling at 8,338, up 49 points.

Among broader markets, BSE Midcap and BSE Smallcap rose 0.7% and 0.6% respectively.  

 "Anything beyond 8,345 region can be expected to attract volatility for the time being. On the other hand 8,400-8,450 appear as the next objectives in a very optimistic scenario, while slippage past 8,230 could allow bears to tighten grip," said Geojit BNP Paribas in a note.

 On Monday, foreign portfolio investors (FPIs) sold shares worth a net Rs 21.20 crore, while Domestic institutional investors (DIIs) bought shares worth a net Rs 253.36 crore, provisional data available with BSE showed.

 Sectors and Stocks

 Tata Steel, Coal India, Lupin, L&T and HDFC Bank were the top gainers while Bajaj Auto fell around 1% making it the biggest laggard in BSE Sensex.

IOC gained over 1% after reports global brokergae CLSA said it higher chances of earnings surprise by IOC than peers and stabilisation of Paradip refinery remains a key trigger for the stock.

IndusInd Bank rose over 3% to Rs 1199.7 on BSE Sensex after strong Q3 results. Also, CLSA maintained ‘Buy’ on the stock and upgraded the target price to Rs 1,450 from Rs 1400 earlier and Morgan Stanley is overweight with a target price of Rs 1,500.

 Shares of metal companies are in focus with the Nifty Metal and S&P BSE Metal index hitting their respective 52-week highs on Wednesday in intra-day trade after rally in steel stocks.

JSW Steel, Tata Steel, Hindalco Industries, National Aluminium Company (Nalco), Coal India, Jindal Steel & Power (JSPL), Steel Authority of India (SAIL), NMDC and Bhushan Steel from the metal index were up 2% to 6%.

Auto sales at 16-year low

 Monthly automobile sales growth rate in India slipped to a 16-year low in December with total vehicle sales declining by 18.66 per cent as demonetisation hits the industry hard.

 According to latest Society of Indian Automobile Manufacturers (Siam) data, most of the major segments, including scooters, motorcycles and cars, witnessed record decline December sales as the automobile sector continued to bear the brunt of negative consumer sentiments in the wake of the ban of Rs 500 and Rs 1,000 notes announced in November. It sparked a severe cash shortage that dented demand. Sales fell 18.66% in December to 1.2 million units, the biggest monthly drop since the same month in 2000.

 Mixed outlook on Indian economy

 The World Bank has cut India’s projected GDP to 7% from 7.6% in the current financial year after taking into account the impact of demonetisation. It stated the impact of demonetisation was for the short term. The forecast is just a tad below the Advance Estimates put out by the Central Statistical Office (CSO) which estimated the growth to be at 7.1% without considering the effect of demonetisation.

 Meanwhile, International rating agency Moody’s Investors Service maintained a positive outlook (Baa3 positive) on India and said that beyond the short-term negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required.

 Other Developments

 Gold rose to a six-week peak on Tuesday, supported by earlier weakness in the dollar ahead of a news conference on Wednesday by U.S. President-elect Donald Trump. The market is looking for more clues on Trump's spending plans in the first speech since his shock election win in November.

 Oil prices edged up on Wednesday, lifted by a small supply cut by crude exporter Saudi Arabia, but markets remained under pressure from signs that the planned OPEC output reductions were being poorly implemented and as supplies from elsewhere rose.

 Prices for Brent crude futures, the international benchmark for oil prices, were trading at $53.77 per barrel, up 13 cents from their last close while WTI crude oil futures were at $50.96 a barrel, 14 cents above their last settlement.

 Global Markets

 Asian shares stood near two-month highs on Wednesday as investors looked to President-elect Donald Trump's news conference later in the day for any clues to his policies on tax, fiscal spending, international trade and currencies.

 While his plan for tax cuts and infrastructure spending has boosted U.S. shares and the dollar, his protectionist statements have kept many investors on guard.

 MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early Wednesday trade.

 It stood at its two-month highs, essentially coming back to where it was just before the U.S. election after recovering from their losses of over five percent.

 Japan's Nikkei ticked up 0.2%.

 On Wall Street, the S&P 500 ended flat on Tuesday, as investors look also to earnings season, which starts this week, to assess if the record levels are justified, following 5% gains since the election. Dow Jones index fell 0.2%, to close at 19,855 while Nasdaq Composite index inched 0.4% higher for record close.