Sensex breaches 27,000-mark on strong Asia cues; Auto, oil shares in limelight

After a three-day retreat, key benchmark indices bounced back sharply in early Thursday trade with the Sensex breaching the crucial 27,000-mark, a rally mostly backed by upbeat Asian markets sentiment following a weak US economic data that once again pushed back worries about the impending Fed rate hike in the next two months.

The Sensex, after dropping 300 pts in last three sessions in an extremely sluggish trades, recouped most of its losses as the index jumped 238 points to touch a high of 27,018.14 on across the board buying. However, automobile shares were the star performers as investors are expecting the benign interest rate scenario coupled with falling fuel prices and new launches would help revive the sluggish automobile sales in the next couple of months. With growing concerns of US rate hike abating in recent weeks and most of the currencies stabilising against the dollar, buying has picked up momentum in commodity-related stocks such as oil & gas and metal stocks.

Also, recent domestic economic data pointing towards a steady recovery coupled with foreign investors turning net buyer of shares in the current month so far has provided major impetus to the broad market sentiment, said dealers. Till last week, FIIs bought shares worth around Rs 2,100 crore after emerging net sellers of equities to the tune of Rs 22,628 crore in last two months.

At 10.45 am, the 30-share BSE S&P Sensex was at 26,983.60, up 203.94 points, or 0.8 percent from previous close. The 50-stock CNX Nifty was at 8,169.50, up 61.60 points, or 0.8 percent.

Market breadth was upbeat in early trade with 1,379 stocks advancing against 605 declines on BSE.

Among other Asian indices, China’s Hang Seng jumped nearly 2 percent and Shanghai Composite rose 1.4 percent while Japan’s Nikkei gained 0.8 percent in early trades, after the US retail sales and producer prices data announced on Wednesday were weaker than expected.

Riding the early buoyancy in markets, Tata Motors led the pack, surging 4.1 percent to Rs 366.95, Gail rose 2.2 percent to Rs 323.50, ITC gained 2.1 percent to Rs 351.55, Maruti moved up 1.7 percent to Rs 4,323, Lupin added 1.6 percent to Rs 2,095.50 and SBI was up 1.6 percent to Rs 248.05.

Others such as ONGC, HeroMoto Corp, Vedanta, Sun Pharma, Axis Bank, ICICI Bank and Dr Reddy’s were up around a percent each.