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Equity benchmark indices extended gains on Tuesday, led by a rise in auto and consumer stocks, tracking their Asian and European peers higher on hopes of a China stimulus package.
The Nifty 50 index settled 0.43 per cent higher at 19,439.40, while the S&P BSE Sensex rose 0.42 per cent to 65,617.84.
FMCG and auto drives momentum
Eight of the 13 major sectoral indexes logged gains, with auto and fast moving consumer goods (FMCG) indexes adding over 1.2 per cent each after several brokerages, including HSBC, Citi and Jefferies, reiterated their bullish outlook on earnings growth in the sectors.
Jefferies expects a growth in sales of passenger vehicles and two-wheelers in the June quarter, aided by operating leverage and lower commodity costs. Eicher Motors , Tata Motors and Maruti Suzuki were among the top Nifty 50 gainers.
Healthy demand and margin expansion due to moderation in inflation will likely drive first-quarter earnings, Pankaj Chhaochharia and Abhimanya Godara, analysts at Antique Stock Broking, said.
They, however, cautioned that the gains could be incremental due to elevated valuations. “Indian equities are trading at 20.2 times one-year forward P/E multiple, compared to the long-term average of 18.4 times.”
Among individual stocks, agri chemical firm UPL lost over 2 per cent on rising concerns over demand after global peer FMC lowered its 2023 revenue forecast, citing decline in volumes across geographies. The stock was the top Nifty 50 loser.
Investors now await India’s inflation print, due after market hours on Wednesday. Retail inflation likely snapped a four-month decline in June due to rising food prices, a Reuters poll of economists showed ahead of official data.
Asian markets rose 1.5 per cent after China extended support to the property sector, while European shares edged higher.
Thomson Reuters
