Key gauges rally in early noon session; Metal, Healthcare stocks surge

Key equity gauges were rallying in the early noon session with Sensex and Nifty gaining more that 190 and 50 points respectively, on the back of strengthening of rupee against the dollar and firm Asian cues. Some support came in with Chief Executive Office and Managing Director of BSE Ashishkumar Chauhan’s statement that India will hit double-digit growth rates soon with growing GDP, legislative reforms such as GST and IBC, bolstered trading sentiments. Besides, heavy buying in Metal, Healthcare and Power also helped the markets to extend their gains. Amongst the individual stocks on the BSE, Tata Motors gained the most, followed by Sun Pharma and Axis Bank. Separately, Pharma sector was in focus amid a report stating that the pharmaceutical industry is likely to report a 17 percent revenue growth in the June quarter (Q1FY19), driven by strong domestic growth and currency tailwinds. PSU banks’ stocks were also in limelight as Public sector banks are planning to tap the markets to raise more than Rs 50,000 crore this fiscal to shore up their capital base for business growth and meeting regulatory global risk norms.

On the global front, All the Asian Markets were surging as favourable U.S. jobs data whetted risk appetites. Meanwhile, investors continued to keep an eye on trade after the U.S. and China exchanged tariffs last week. Back home, Investors will look forward to the key macroeconomic data such as CPI inflation and industrial production and also to the June quarterly results of heavyweights such as TCS, Infosys and IndusInd Bank, that will be announced later this week. The overall market breadth on BSE was in the favour of advances; there were 1525 shares on the gaining side against 752 shares on the losing side while 110 shares remained unchanged. In scrip specific development, Tata Steel surged after it reported strong quarterly sales data. Besides, Maruti Suzuki gained on reporting 11.75% rise in June production.

The BSE Sensex is currently trading at 35851.17, up by 193.31 points or 0.54% after trading in a range of 35779.72 and 35931.09. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 0.93%, while Small cap index up by 1.06%.

The top gaining sectoral indices on the BSE were Metal up by 1.14%, Healthcare up by 1.11%, Power up by 1.10%, Industrials up by 1.06% and Auto up by 1.01%, while, there were no losers on the BSE sectoral front.

The top gainers on the Sensex were Tata Motors up by 2.01%, Sun Pharma up by 1.89%, Axis Bank up by 1.86%, Vedanta up by 1.82% and Yes Bank up by 1.82%. On the flip side, TCS down by 1.24%, HDFC down by 0.54%, Coal India down by 0.41% and Bharti Airtel down by 0.01% were the top losers.

Meanwhile, Union minister for road transport and highways Nitin Gadkari is calling for alternative fuels in order to ease India’s growing crude oil import bills and also to create other sources of income for farmers, who comprise more than 50 percent of the country’s population. He noted that alternative fuels are cleaner and cheaper.  Besides, he said that the use of ethanol, methanol, bio-compressed natural gas, dimethyl ether and electricity should be increased as alternatives to crude oil, 70 percent of which has to be imported. He added that the benefit of these alternative fuels is that its raw material is available in the country and can be sourced in large quantities from the agricultural sector and it will help farmers increase their income too.

Talking about financial strain crude oil imports place on the country, Gadkari said that they spend Rs 7 lakh crore annually to import crude oil. He also said that the economy is facing challenges - one of which is the heavy crude import bill. He added that the rupee's fall against the US dollar is also related to this. Adding further, he said that increasing production of oil within the country has its limitations and noted that imports comprise 70 percent of crude oil demands while domestic generation stood at only 30 percent.

The minister said “At present, ethanol is received from sugar mills and we mix 5 per cent of it to petrol. This mix can be raised up to 22 per cent but we do not produce ethanol in large quantity. Currently, we get about 4 per cent ethanol after crushing one tonne of sugarcane.” He also said that the government has allowed the use of B-heavy molasses for ethanol production to increase its production. He said “Once ethanol availability goes up, we can blend more of it with petrol.” However, he is not satisfied with these small steps and has decided to go for vehicles which are capable of running on 100 percent ethanol or methanol.

The CNX Nifty is currently trading at 10825.05, up by 52.40 points or 0.49% after trading in a range of 10807.15 and 10844.70. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Dr. Reddys Lab up by 2.66%, Axis Bank up by 2.09%, Vedanta up by 2.01%, Tata Motors up by 1.99% and Sun Pharma up by 1.89%. On the flip side, TCS down by 1.33%, Ultratech Cement down by 1.00%, HDFC down by 0.73%, Zee Entertainment down by 0.73% and Grasim Industries down by 0.36% were the top losers.

All the Asian Markets were surging; Nikkei 225 increased 264.04 points or 1.2% to 22,052.18, Hang Seng surged 496.38 points or 1.72% to 28,812.00, KOSPI advanced 14.55 points or 0.64% to 2,287.42, Shanghai Composite soared 51.79 points or 1.85% to 2,799.02, Taiwan Weighted improved 111.71 points or 1.04% to 10,720.28, Straits Times increased 35.14 points or 1.09% to 3,226.96 and Jakarta Composite was up 64.61 points or 1.12% to 5,759.52.