▲ Nifty: 11,604 (+0.72%) ▲ Sensex: 39,302 (+0.66%)
The Nifty50 index witnessed a decisive upward movement today. The rally was supported by buying seen across major sectors including IT, banks, auto and pharma. M&M (+4%), Dr. Reddy’s (+4.4%), Hindalco (+3.9%) and Bajaj Auto (+3.5%) were among the top gainers. The Nifty50 is now just shy of its recent high of 11,647, which it scaled on 28 August.
Here are the top stories of the day.
Auto stocks in fast lane ahead of festive season
With the Shradh period ending on September 17 (tomorrow) and festivals like Navratri, Dussehra and Diwali approaching, demand for automobiles is expected to pick up. The auto sales volumes in August indicated a recovery in certain segments, and now hopes are pinned on the upcoming festive season. Investors were upbeat on auto stocks today, as M&M (+4%), Bajaj Auto (3.5%), Tata Motors (1.7%), and TVS Motors (1.6%) saw healthy gains. Apart from tractors, which are already seeing strong demand, two-wheelers are expected to witness a cyclical rally, supported by rural demand and shift toward personal mobility. Meanwhile, M&M was up nearly 5% in intraday trade on the buzz that SsangYong, its ailing Korean subsidiary, is close to signing an investment agreement with U.S. based company HAAH Automotive Holdings.
Dr. Reddy's stock spurts on tie-up for trials and supply of Covid vaccine
Dr. Reddy's Laboratories (DRL) has partnered with the Russian Direct Investment Fund (RDIF) to bring the Covid vaccine to India. DRL will conduct trials in India to ensure the safety and efficacy of the vaccine, and to meet requirements of Indian regulators. If all goes well, RDIF will supply 10 crore doses to DRL, deliveries of which could begin before the end of this year. DRL shares jumped 4.4%% today. This is definitely positive news for the broader markets, especially at a time when India has crossed 50 lakh coronavirus cases.
Crude oil prices jump as hurricane shuts US output
The U.S. crude oil prices rose over 2% with more than 25% of U.S. offshore oil output being shut and export ports closed as Hurricane Sally hit the U.S. Gulf Coast. The rise in oil prices was also supported by falling crude oil stocks. As per the data released by the American Petroleum Institute (API), stockpiles dropped by 9.5 million barrels against expectations of a rise in inventories. Since the start of September, crude oil prices have dropped nearly 10% on fears of weak oil demand due to the slow economic recovery.
Closing bell
After the U.S. Fed conveyed its accommodative stance in its July meeting, the curiosity over interest rates has waned. From today's Fed meeting, the markets would look to get directional cues on the GDP, unemployment and inflation. In other news, Yoshihide Suga was elected as Japan’s new PM on Wednesday, following former PM Shinzo Abe’s resignation over health reasons. Mr. Suga has indicated that he will continue the existing cabinet and his predecessor’s policy framework.