Sensex, Nifty rise on positive Wall Street cues; bluechips rule

Sensex ended higher by 311.22 points at 25,764.78 and the 50-share Nifty gained 106 points at 7,823.

After witnessing a steep fall for last three trading sessions, markets rebounded in today’s trade and ended firm on the back of renewed buying across the bourses.

Apart from the positive global cues, the growth in services sector for the month of August also lifted the sentiment on D-Street.

The 30-share Sensex ended higher by 311.22 points at 25,764.78 and the 50-share Nifty gained 106 points to close at 7,823.

In line with the benchmark indices, the broader markets also witnessed some buying demand. BSE Midcap and Smallcap surged over 1%.

The market breadth ended positive on the BSE with 1,718 advances versus 970 declines.

On the currency front, the rupee was trading flat at 66.19 against the US dollar on increased selling of the American currency by exporters and banks.

Market view

According to Ranak Merchant, Technical Analyst - Strategies of Sushil Financial Services, “A series of unfortunate events continue to haunt world equity markets, and our own haven't been spared the horror.

While the day was indeed a welcome respite, it would be too early to judge as the recent memory has been witness too such alternate bouts of reds and greens.

September as it holds, will be privy to events such as the Fed meet and thereafter our own RBI policy meet.

Both events continue to enchant markets and hence volatility would continue to be on the higher number.

Technically markets are trending in an oversold territory in the short term and a bounce is on the cards.

She further adds, “The recent panic bottom of 7667 and the previous of 7724 offer a support zone while 7850 would confirm the onset of a bounce. Watch Nifty spot above 7850 for crossover and sustenance for a bounce till 8225 in an attempt to fill in the earlier downward gap.

Traders are cautioned against high leverage on either sides and to have adequate hedge for positions. Investors can use the slump and sell off to accumulate with a perspective of 2 years and beyond.”

World markets

World stocks rose on Thursday, lifted by a strong rally on Wall Street the previous day, but investors remained cautious ahead of a potentially critical 24 hours that will include a European Central Bank policy meeting and the latest US jobs data.

The ECB is expected to lower the central bank's growth and inflation forecasts on Thursday, while Friday's US employment data could be a major factor in determining whether the Federal Reserve raises interest rates later this month.

Investors are broadly betting that global monetary policy will be kept looser for longer as central banks try to mitigate the recent market turmoil stemming from the market volatility and growing economic worries in China.

Japan's Nikkei rose for the first time in four days, gaining 0.7%, but weakness in Australia and falls in Asian currencies drove the MSCI's broadest index of Asia-Pacific shares outside Japan down 0.2%.

China's stock markets, the root of much of the global volatility in recent weeks, were closed on Thursday.

Sectors and stocks

BSE Realty index surged over 4.5% followed by counters like Metal, Consumer Durables, Banks, Auto and Power, all gaining between 1-2%.

Infact, all the sectoral indices ended in positive zone. Shares of real estate companies rallied up to 8% on the bourses after falling sharply in past couple of months. DLF, Housing Development and Infrastructure (HDIL), Indiabulls Real Estate, DB Realty and Oberoi Realty were up between 5-8% while Unitech, Godrej Properties, Sobha, Delta Corp, Ashiana and NBCC gained between 1-4%.

From the metal space, Tata Steel was the top Sensex gainer, up over 4%.

Vedanta surged by almost 4%. In its bid to rescue Vedanta's alumina refinery at Lanjigarh, the Odisha government put its mining PSU Odisha Mining Corporation (OMC) on the job to start mining from Karlapat mines at the earliest.

Financial shares also witnessed renewed buying demand after falling significantly in last few sessions. HDFC, Axis Bank, HDFC Bank, SCI and ICICI Bank gained between 1-4%.

Shares of Tata Motors shares rose over 2% after Sanand plant decided to roll out first non-Nano model in December. Bajaj Auto gained around 2%.

The company reported a 2% increase in total sales in August at 3,41,965 units as against 3,36,840 in the same month of 2014.

ONGC inched up around 2% after the company decided to join hands with British Gas to conduct a study to reestablish exploration in Cauvery Basin Offshore.

Other notable gainers from the Sensex pack were Hindalco, BHEL, L&T, Wipro and Cipla.

On the losing side, Lupin, Hero Moto, Sun Pharma and Dr Reddy’s Labs dipped between 0.01-1%.

Smart movers

Jet Airways was up over 2% after the airline's board at its meeting on Wednesday approved a scheme of merger of its loss-making wholly-owned subsidiary Jet Lite (India) Ltd. Jindal Drilling & Industries soared 11.5%, extending its previous day’s 19% surge on the BSE, after the Cabinet approved auction of 69 oil & gas fields and also approved a separate policy for these fields.

Shares of Amtek Group companies such as Amtek Auto, JMT Auto, Metalyst Forgings and Castex Technologies reeled under selling pressure, falling by up to 34% in otherwise firm market.

Unichem Laboratories surged 13%, extending its two month rally on the National Stock Exchange (NSE) amid heavy volumes.

(With Reuters input)

Photograph: PTI