Sensex hits fresh 16-month high; auto stocks drive rally

Sensex posts worst day in two weeks ahead of Yellen speech

Absence of any major trigger and worries over higher U.S. interest rates could pull-out massive money from emerging markets in the backdrop-off domestic derivative expiry for August month ruled overall weak trading sentiment for the week.

In line with strong global markets, the BSE benchmark Sensex rallied over 440 points to close at an over 13-month high of 28,343.01 and the broader NSE Nifty hit 16-month highs by going past the crucial 8,700-mark, as gains were seen across the board.

The Sensex resumed higher at 28,498.72 and hovered between a high of 28,581.58 and low 28,427.63 before closing at 28,532.11, showing a gain of 108.63 points or 0.38 per cent.

The Sensex has so far touched a high of 28,532.25 points and a low of 28,363.10 points during the intra-day trade.

On the Sensex, 16 of the 30 constituents ended higher Thursday, while overall declining issues outnumbered advancing ones 1,656 to 1,077 and 169 closed unchanged.

Fed Chair Janet Yellen and a couple of Fed policymarkers recently made hawkish comments on rate hike.

Elsewhere, Asian shares were mixed as traders awaited the latest USA jobs report, the strength of which could help determine the timing of the next interest-rate increase.

Telecom major Bharti Airtel slumped 6.5 percent, rival Idea Cellular plunged 11 percent and Reliance Communications shed 9.2 percent, after Reliance Industries Chairman Mukesh Ambani announced free voice calling, zero roaming charges and cheaper data tariffs for Jio customers from Monday, September 5.

However, Shares of Coal India fell by 1.64 percent followed by RIL 1.58 percent, Hind Unilever by 0.73 percent, Infosys 0.64 percent and Power Grid 0.49 percent. Some support also came with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 286.52 crore on August 29, 2016.

Sentiment was also somewhat subdued after data released late on Wednesday showed India’s economy grew at a much lower-than-expected 7.1 percent in the April-June quarter, its slowest pace in 15 months.

Tata Motors (up 1.2 per cent), Lupin (up 1.2 per cent), Hero MotoCorp (up 1.2 per cent), ICICI Bank (up 1.2 per cent), and HDFC (up 1 per cent) were the major Sensex gainers.

Asian indices like Hong Kong, South Korea and China’s Shanghai Composite Index gained by up to 0.45 per cent.

The US Dow Jones Industrial Average ended 0.58 per cent higher yesterday. Buying was led by auto, bankex, capital goods, FMCG, consumer durables, PSUs, healthcare, oilgas, power, metal and IT sectors substantially supported by midcap and smallcap company shares and debuting new IPOs, while, realty and tech counters witnessed profit-booking.