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Sensex Up 137 Pts on CAD, Auto Sales

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The benchmark S&P BSE Sensex was up 137 points today after current account deficit numbers came in better than expected and auto sales picked up last month, helping investors to shrug off concerns about the US government shutdown.

Realty, bank, capital goods and auto sector stocks gained, while oil and gas and power shares fell. HDFC Bank, HDFC and ICICI Bank helped to lift the Sensex from a three-week low.

Auto stocks got a boost from higher September sales for Maruti Suzuki, Hero MotoCorp and TVS and a Rs 3.05 a litre cut in petrol prices, the first reduction in over five months.

The 30-share Sensex resumed higher at 19,452.05 and slipped to 19,264.72 before recovering and ending at 19,517.15, a gain of 137.38 points or 0.71 per cent.

In the previous two sessions, the index lost 514 points, ahead of the release of current account deficit data and as investors turned jittery about the US government shutdown.

"Sentiment was cautious after the news of US government shutdown. However, markets seemed to not show any impact of this news today," said Rakesh Goyal, senior vice president at Bonanza Portfolio Ltd. "CAD widened to 4.9 percent of GDP to 21.8 billion in the April-June quarter...however it came better than expected."

The broader CNX Nifty on the National Stock Exchange rose 44.7 points, or 0.78 per cent, to 5,780.05.

The SX40 index on the MCX Stock Exchange closed at 11,619.91, up 53.26 points.

Higher gold and oil imports pushed the CAD to $21.8 billion, or 4.9 per cent of GDP, in the April-June quarter, the Reserve Bank of India said after the markets closed yesterday. The CAD, the difference between inflow and outflow of foreign exchange, was $16.9 billion, or 4.4 per cent of GDP,  a year earlier.

Asian markets gained as investors assessed the US government shutdown and a report showed confidence among large Japanese manufacturers increased. Japan's Nikkei 225 gained 0.2 per cent, South Korea's Kospi rose 0.1 per cent and the Straits Times index in Singapore climbed 0.43 per cent.

European stocks were mixed. France's CAC and Germany's DAX moved up, while UK's FTSE fell.

In the domestic market, 16 Sensex shares gained, led by HDFC Bank 3.03 pc, BHEL 2.95 per cent, ICICI Bank 2.94 per cent, HDFC 2.73 per cent and State Bank of India 1.75 per cent.

Losers on the index included Tata Power, which dropped by 3.82 per cent, Sesa Goa 2.91 per cent, NTPC 2.87 per cent, ONGC 2.11 per cent and Jindal Steel 1.3 per cent.

Among the sectoral indices, S&P BSE-Realty rose 2.69 per cent, followed by S&P BSE-Bankex 2.67 per cent, S&P BSE-Capital Goods 1.53 per cent, S&P BSE-Auto 0.9 per cent and S&P BSE-Consumer Durables 0.63 per cent. S&P BSE Oil & Gas eased by 0.62 per cent and S&P BSE-Power 0.59 per cent.

The mid-cap and small-cap indices moved up by 0.57 per cent and 0.47 per cent, respectively, on renewed buying from retail investors.

The market breadth turned positive as 1,317 stocks ended with gains while 1,004 closed lower and 166 ruled steady.

The BSE and the National Stock Exchange are closed tomorrow, October 2, for Gandhi Jayanti.


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