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Auto, bank stocks propel Sensex & Nifty to near 4-month high

Investors were upbeat as they reacted to the positive news on the US-China trade war front.

Oct 29, 2019, 04.32 PM IST
Asian shares crept to a three-month peak on Tuesday.
Mumbai: BSE Benchmark Sensex rallied nearly 600 points on Tuesday, extending gains for a second session in Samvat 2076, buoyed by hopes of a US-China trade deal, better-than-expected earnings and reports of that tax sops for the equity market.

Investors were upbeat as they reacted to the positive news on the US-China trade war front. US President Donald Trump on Monday said he expected to sign a significant part of the trade deal with China ahead of schedule, but did not elaborate on the timing.

The earnings season so far has also sprung up positive surprises. Tata Motors saw improved earnings from unit Jaguar and Land Rover, which helped the automaker beat estimates and showed promise of improved earnings going ahead.

Top lender State Bank of India (SBI) posted a more than three-fold rise in September quarter profits.

The sentiment was also positive after a media report claimed another major tax tweak from the government for the equity segment was in the offing and was likely to be announced before Union Budget in February.

Market at a glance
BSE Sensex jumped 1.48 per cent or 581.64 points to close at 39,831.84, while NSE rose 1.37 per cent or 159.70 points to close at 11,786.85 points. It was the highest closing since July 5 for Sensex and Nifty.

Market breadth was positive with gainers beating losers in the ratio of 1.4:1 on the BSE.

All the sectoral indices barring BSE Telecom index, closed higher. BSE Telecom index shed 4.39 per cent. Auto and Metal indices gained the most. They advanced 4.25 per cent and 4.19 per cent, respectively.

Tata Motors was the top gainer, as its shares raced ahead by 16.63 per cent. Tuesday’s surge was in addition to a 16 per cent surge in the one-hour Muhurat trading session on Sunday, after the company’s September quarter results raised hopes that the British arm JLR was back on track.

Energy-to-telecom conglomerate Reliance Industries rallied 2.30 per cent, contributing most to the Sensex’s gain, after the company said it will set up a new subsidiary to bring all its digital initiatives and apps under a single entity, and infuse Rs 1.08 lakh crore equity into this new unit, which will make Jio debt free.

Metals producer Tata Steel jumped 7.09 per cent, while top the country’s largest carmaker Maruti Suzuki, rallied 4 per cent.

Analyst views
"Festive season has suggested consumer buying has returned. The pent up demand in the system is present. FIIs have stopped selling and started putting in new money. Earnings season so far has produced better-than-expected results. Valuations have been compelling for investors to buy," said Deven Choksey, group managing director, KR Choksey Investment Managers.

“The market in the near term is likely to be driven by earnings outcome and auto volume numbers, which will be a crucial indicator of revival in consumer spending. Further, global cues will also induce volatility as expectations are high from the on-going US-China trade negotiations. Further, outcome of US fed meet (scheduled for October 29-30) will also influence the market trend,” said Ajit Mishra vice president, research, Religare Broking.

Global markets
Asian shares crept to a three-month peak on Tuesday after Wall Street hit all-time highs amid hopes of progress in Sino-U.S. trade talks and for another dose of policy stimulus from the Federal Reserve this week, Reuters reported.

MSCI’s broadest index of Asia-Pacific shares outside Japan nudged up 0.2% and touched its highest since late July.

European shares retreated from a near two-year high on Tuesday as investors parsed through a mixed bag of earnings, with optimism surrounding the U.S.-China trade progress and Brexit keeping losses in check, according to a Reuters report.

The pan-European STOXX 600 fell 0.2% at 0813 GMT after scaling a 21-month high in the previous session.
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