The positive bias was aided by metal, realty and auto indices
Benchmark indices today settled on a positive note after Sensex rallied almost 200 points and Nifty reclaimed 8000 levels at close. Investor sentiment turned positive as Asian shares rallied on Wall Street hitting record highs and oil surged to 3-week high.
The indices bounced back from 6-month lows with Sensex snapping it’s six-session long losing streak to reclaim its 26,000 levels during early morning trade, rising as much as 274 points.
The S&P BSE Sensex settled at 25,960, up 195 points, while the broader Nifty50 was quoting 8002, up 73 points. In broader markets, Both BSE Midcap and Small cap gained over 1% each.
The positive bias was aided by metal, realty and auto indices. However, the upside is capped due to selling pressure among capital goods shares.
"The market turned positive after six consecutive days of fall, the positive traction in global market and short covering ahead of expiry providing an interim relief. However, investors are not completely inclined to place a fresh bet due to the cloudy concerns of demonetization and the strengthening dollar," said Vinod Nair, Head of Research, Geojit BNP Paribas Financial Services.
Deutsche Bank cut its December Sensex target to 25,000 from 27,000 and expects the remainder of 2016 to be highly uncertain on global headwinds.
"We expect the remainder of 2016 to be highly uncertain, which will keep markets volatile with a downward bias. We cut our December 2016 Sensex target to 25,000 (from 27,000 earlier)," Deutsche Bank said in a report.
Sectors and stocks
Auto stocks led the gains on BSE with Maruti Suzuki up 3.4% after falling 3.3% on Monday. Bajaj Auto, Hero Moto and Tata Motors also gained 3.18%, 2.53% and 1.79% respectively.
Realty was the top sectoral gainer on both the headline indices. Swinging between gains and losses Sobha settled the 7% higher after falling to its 52-week low at intra-day on Q2 results. The company reported a flat consolidated net profit at Rs 38.4 crore for the quarter ended September 30, 2016 (Q2FY17).
Among other realty stocks, Prestige was up over 7% while DLF gained 3.5%. Nifty Bank pared all its losses to settle the day 0.55% higher, snapping it’s seven day losing streak.
Fitch, today, re-affirmed its "negative" outlook for India's banking sector, saying the financial standing remained "fragile" without bigger capital injections and that the government's action on banknotes could end up having a mixed impact.
Metal indices were up 2.7%, all constituents gain led by Hindalco which rose over 6%.
Among other shares, PNB Gilts hit a new high of Rs 51.30, up 10% on BSE, extending its month-long rally after it reported a robust set of numbers for the second quarter ending September 30, 2016 (Q2FY17).
Among decliners, Larsen & Toubro fell 1.5% ahead of its Q2 earnings report. Wockhardt also fell to its 52-week low of Rs 683, down 1.4% on the BSE in intra-day trade to settle the day 0.48% lower.
Global markets
Asian stocks rose to one-week highs, helped by solid overnight gains on Wall Street, though investors were wary of chasing prices higher until President-elect Donald Trump picks his economic team. Oil extended gains.
Crude oil climbed in Asian trading with U.S. West Texas Intermediate (WTI) up 1% as the dollar pulled back and expectations of production cuts grew.
Prices surged 4% to a three-week high on Monday, after comments from Russian President Vladimir Putin raised hopes that producer countries will reach a deal at a meeting next week to limit output.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.3%, pulled up by a 1.3% rally in Australian shares. Korean shares and Hong Kong stocks rose 0.9 and 1.3% each.
Metals and mining shares climbed 3% on Tuesday underpinning a firm open for Europe's benchmark stock index as the global reflation trade in the wake of Donald Trump's victory in the U.S. presidential election continued.
The pan-European STOXX 600 index rose 0.7% in early trades. The index is still down about 6 percent so far this year.
In the United States, all three major stock indexes set record closing highs on Monday. Small caps also rose, pushing the Russell 2000 index to a record high close, with the session marking the first time all four indexes hit closing records on the same day since Dec. 31, 1999.
Photograph: Danish Siddiqui/Reuters