Sensex tops 19K; Ambani bros' deal lifts ADAG stocks

Shares rallied Tuesday after a sedate start, with investors appearing to have regained their appetite for midcap stocks. The BSE Sensex finished above the psychological 19,000-mark, up 176 points over its previous close. The Nifty rose 43 points to close at 5748.

The biggest news of the day was an inter-city fiber sharing agreement between the Ambani brothers. The deal had a positive effect on Anil Ambani's group stocks. Reliance Power, Reliance Capital and Reliance Broadcast ended with hefty gains.

Reliance Jio Infocomm and Reliance Communications (RCom) sign Rs 1,200 crore agreement for sharing of RCom's nationwide optic fiber network. Reliance Communication stands to be the biggest beneficiary from the deal. The stock was up 11 percent.

Reliance Jio Infocomm to utilise multiple fiber pairs across RCom's 1,20,000 kms nationwide inter-city optic fiber network. RCom to have reciprocal access to fiber infrastructure built by Reliance Jio Infocomm in future.

Metal, capital goods, oil & gas and pharma were among the best performers, while investors cold shouldered shares from the auto, FMCG and realty sectors.

Midcap shares outperformed their large cap counters, but market experts said it was too early to say if the trend will sustain.

While the rally took most players by surprise, near term outlook on the market remains cautious in the absence of any positive triggers.

Auto sales in March declined, reflecting the slowdown in the economy, and the widely held view is that March quarter corporate earnings will most likely disappoint.

''I do not think we will have much cheer for the next six months in terms of earnings,'' Sandeep Bhatia of Kotak said in an interview to CNBC-TV18 earlier today.

''The focus is on incremental announcements by the government to see if the diesel price increase is on track or if the government is not falling apart, because some ally has decided to move out,'' he said.

Brokerage house Bank of America Merrill Lynch expects more earnings downgrades this financial year, because of the slowing economy and weak demand.

''We expect FY14 Sensex EPS to be downgraded below Rs 1300, for growth of under 10 percent,'' said the Merrill Lynch note to clients.

The market was going strong in the last trading hour of the day. The Sensex was up 190.11 points at 19054.86 while the Nifty gained 49.35 points to be at 5753.75.

Smallcaps and midcaps were outperforming, adding 2.2 percent, 1.3 percent respectively.  Ramky Infrastructure surged 13 percent as the company bagged orders worth Rs 387 crore. Mangalore Chemicals was up 20 percent after 8.5% equity changed hands in a range of Rs 33.15-38.50 a share.

Other big gainers in the Sensex were Sun Pharma, Wipro, Sterlite, Maruti Suzuki and ONGC.

Meanwhile, auto stocks continued to lose. Bajaj Auto, HDFC, Hero MotoCorp, Bharti Airtel and ICICI Bank were the biggest losers of the day.

The market picked up in afternoon trade. The Sensex was up 134.66 points at 18999.41. The Nifty managed to cross 5700 and was at 5738.30  (up 33.90 points) led by pharma, capital goods and metal select commodity stocks. Select rate sensitives, meanwhile, were under pressure.

Sun Pharma (up 4 percent), Sterlite (up 3.4 percent), Wipro (up 3.3 percent), ONGC (2.5 percent) and Cipla (up 2.2 percent) were the key gainers on the Sensex. Much greater traction was seen across broader markets. The midcap index was up 1.2 percent. BF Utilities, Delta Corp and GSPL were some of the key gainers from that space.

Mangalore Chemicals was up 20 percent after 8.5% equity changed hands in a range of Rs 33.15-38.50 a share.

Meanwhile, auto stocks continued to lose. Bajaj Auto, Tata Motors, ICICI Bank, Tata Power and Bharti Airtel were the biggest losers in the Sensex.

The market picked up in afternoon trade with the Nifty trading above 5700 mark. The rally was led by pharma, capital goods and metal stocks.

European markets have open in green. Greater traction is seen across broader markets. The midcap index is up close to a percent and the breadth is also healthy. Oil & gas stocks, infrastructure and pharma are among the big winners.

The Sensex is up 89 points at 18953 and the Nifty up 21 points at 5726.

The Nifty continues to trade in green for the third successive session. The index has rallied more than 90 points in three sessions.

Auto stocks are under pressure today. Tata Motors reacts negatively to a disappointing set of March sales numbers. Bajaj Auto too sees nearly 10 percent drop in sales. The company's management told CNBC-TV18 that they are looking to achieve 5 million in sales in FY14.

Bucking the trend, Maruti posted marginally higher-than-expected sales. The management says while April sales could be lower than March, they see signs of the car market bottoming out.

Sun Pharma has hit a fresh life-time high of Rs 848.7 in trade today. The stock is up 4 percent. 

The Supreme Court has quashed the 2010 Madras High Court order for closure of Sterlite's Tuticorin unit.

Finance Minister P Chidambaram stresses on the need for foreign investment into India, to fight the rising current account deficit. He says the devaluation of rupee is not an option yet. The rupee is up 4 paise at 54.32.

The market was trading flat at noon. The Nifty was still struggling to breach the 5700. The Sensex was up 12.39 points at 18877.14 while the Nifty slipped 2.60 points to 5701.80.

Capital goods, metals and pharma stocks were lending support to the indices. The biggest gainers of the day included Sterlite, Sun Pharma, Wipro, Tata Steel and Jindal Steel.

Sterlite was up 2.8 percent as the Supreme Court quashed a Madras High Court order and ruled in favour of the firm in a 2010 environmental case wherein the company's Tuticorin plant was charged with violating environmental norms.

Sugar stocks were moving in trade as the Cabinet Committee on Economic Affairs (CCEA) meet today and the sugar decontrol issue is on the agenda.  Bajaj Hindusthan was up 3.3 percent, Balrampur Chini was up 2.6 percent while Shree Renuka gained 2.2 percent.

Ambuja Cements was up above 1 percent as CLSA has upgraded the stock to a buy with a target of Rs 215. It feels any near-term weakness due to demand slowdown is an opportunity to accumulate.

Meanwhile, auto stocks are reacting negatively to the dismal March sales numbers.

Bajaj Auto, Tata Motors, HDFC, Tata Power and ICICI Bank were the major laggards in the Sensex.

Key equity benchmarks continue to trade steady. The Nifty is consolidating around 5700 mark in the morning trade. The Sensex is down 20 points at 18844 and the Nifty is down 11 points at 5693. The broader markets are outperforming largecaps.

Auto sales -- a key indicator of economic health throws up a bleak growth outlook for FY14.

Bajaj Auto, India's second largest two-wheeler maker reported a 10 percent drop in sales in March at 3.01 lakh units on continued sluggish demand for motorcycles.

Hero Honda, TVS and Tata Motors also reported weak sales numbers yesterday. M&M was an exception.

Cairn India, Ambuja Cements, Lupin and Sun Pharma are top gainers in the Nifty.

Cairn India surges on short covering. The Open Interest is down 21 lakh shares.

The manufacturing data hitting fresh 16-month low also weighed negative sentiments on the market.

The focus will now shift to quarterly earnings of the companies starting with IT major Infosys next week.

The rupee is lower in trade. Concerns about the record current account deficit weigh, but bunched inflows keep dollar gains in check, say dealers.

Benchmark indices were sluggish in early trade Tuesday, with investors not seeing any clear triggers either ways. Auto shares were under pressure following weak sales numbers for March, while pharma and capital goods shares were steady.

The Sensex was at 18875, up 11 points and the Nifty at 5702, down 2 points.

Mahindra & Mahindra was an exception to the bearish trend in the auto space, with the stock slightly up over its previous close. M&M reported a 7 percent rise in March sales. Brokerage house JP Morgan has retained its 'overweight' rating on the stock, while cautioning on risks from "a sharper-than-expected increase in competition in the SUV segment; a delayed recovery in tractor segment sales; any delays in a turnaround at its two-wheeler and CV subsidiaries."

Laggards in the Sensex included Tata Motors, Bajaj Auto, Idea Cellular and United Spirits, down 1-2 percent.

Select midcap and small cap shares were in demand, but brokers said the outlook on the broader market remained wary.

"There will not be much cheer for the next six months in terms of corporate earnings; the focus will be on incremental government announcements on reforms," said Sandeep Bhatia of Kotak Securities, in an interview to CNBC-TV18.