Nifty ends above 8,300; oil, auto shares lead

Benchmark indices rebounded after losses in the previous three week to end nearly two percent higher, amid short covering, led by a rally in auto and oil stocks.

The passage of the Finance Bill 2015-16 laying emphasis on clarifications on issues like the Income Tax Return form and the Minimum Alternate Tax (MAT) levied to FIIs also boosted sentiment.

The 30-share Sensex ended 479 points higher at 27,491 and the 50-share Nifty surged 150 points to close at 8,332.

"Buying in auto stocks supported the sentiment with most of the companies releasing better-than-expected monthly sales data for April. There was broad-based buying witnessed in the markets and the broader markets, too, equally participated in the rally," said Jayan Manglik, President-retail distribution, Religare Securities in a post market note.

"We expect this rebound to extend further in the coming sessions; however, participation would restrict to the quality stocks so maintain extra caution in stock selection. At the same time, traders shouldn’t forget that the overall bias is still negative and that would change if Nifty decisively closes above 8,500 otherwise profit taking will resume," he added.

Points out Dipen Shah, head of private client group research at Kotak Securities: "Going ahead, markets will focus on the Parliament proceedings, where the Constitutional Amendment Bill for GST is to be taken up on Tuesday. With the debt - repayment date approaching, Greece will be also a point of focus for the markets. The remaining quarterly results and the accompanying management commentaries will lead to impact on the respective stocks."

ECONOMY

The Indian manufacturing economy recorded a growth slowdown during April. Total new orders increased at a weaker pace and, as a consequence, companies reduced staffing levels and raised output to a lesser degree.

At 51.3 in April, down from 52.1 in March, the headline HSBC India Purchasing Managers’ Index (PMI) – a seasonally adjusted indicator designed to give an accurate overview of operating conditions in the manufacturing economy – pointed to a weaker improvement in operating conditions across the sector. Nonetheless, the headline index recorded above the crucial 50.0 threshold for the eighteenth successive month.

AUTO PACK

Bajaj Auto moved higher by 6.7% after the company reported posting positive vehicle sales growth in April after a gap of four months. 

Shares of Mahindra & Mahindra gained over 4% after the company reported strong growth in tractor exports during April 2015 compared with the same month last year.

Maruti Suzuki climbed nearly 1% after the company reported a healthy 30% year on year (yoy) rise in total sales in April 2015 at 111,748 units against 86,196 units in the corresponding period last year.

Tata Motors reported 7 per cent rise in total sales at 36,205 vehicles in April compared with 33,962 units in the same period last year.  However, the stock lost sheen and was down 0.5%.

KEY STOCKS

On the sectoral front, all indices ended in the positive territory led by FMCG,  Healthcare, Realty, Oil & Gas, Power indices up between 2-3.5%.

ONGC surged 7.4% on reports that the government will foot the entire subsidy bill that oil marketing companies incur on selling LPG and kerosene below market prices in FY2016. So far, ONGC, Oil India and Gail had to share a part of their profits to finance the subsidy burden of downstream firms such as Indian Oil, BPCL and HPCL.

Cipla soared 5.7% as Teva conference call revealed that Nexium generic drove a large part of the revenue and gross profit growth. 

Bharti Airtel climbed 3%. Top four mobile carriers including Bharti Airtel have reduced roaming charges for their subscribers effective April 30, 2015.

BHEL advanced 3%. BHEL has successfully commissioned a 195 MW Thermal Unit in Bihar.

NTPC climbed over 1%. According to media reports, NTPC will build India's biggest power plant with an annual generation capacity of 6,400 megawatt (Mw) in a joint venture with Jharkhand state utility.

Hindalco need not apply for fresh environment clearances (EC) for four blocks allotted to them in the recent auction as the government has transferred to them the approvals granted to the earlier allottees. The stock was up 3%.

Shares of the Aditya Birla Group companies - Pantaloons Fashion & Retail and Aditya Birla Nuvo (ABNL) rallied up to 20% after the group announced a consolidation plan of its garments business into a single entity.

Other prominent gainers include RIL, HDFC, SBI, Infosys, Dr Reddy’s Lab, ITC up between 2-3%.

In the broader market, the BSE Midcap index gained over 1% and BSE Smallcap index soared 2%. Market breadth in BSE ended firm with 1,955 advances against 832 declines.