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Indian shares rally for 3rd session ahead of monthly sales data

Indian stocks rallied for the third session in a row on Tuesday as investors bought into beaten down valuations among…

Indian shares rally for 3rd session ahead of monthly sales data

(Getty Images)

Indian stocks rallied for the third session in a row on Tuesday as investors bought into beaten down valuations among frontline stocks and traders turned aggressive buyers in banking, real estate and automobile shares. A mildly weak trend in major Asian markets failed to deter local bulls.
The Nifty rose 64 points to 8,190 points in late morning deals as the 50-share index rebounded from a 6-month low hit on previous Thursday. Auto stocks were among top gainers on the index with Eicher Motors, Maruti and Mahindra & Mahindra gaining between 2.3-3.4 percent. The gains come ahead of  monthly volume sales data for for such companies as it will reveal the pain of demonetization of 1,000-rupee and 500-rupee notes that came into effect from November 8. 
The subsequent sucking out of financial liquidity from the $2 Trillion economy is likely to adversely impact economic activity. As a consequence, brokerages have substantially cut their GDP estimates and market targets for the current quarter and the ongoing financial year. However, analysts expect the disruption to last for just about two quarters after which the resilience of the economy will resurface. Meanwhile, stock prices have already adjusted to this impact with the Nifty slipping nearly 8 percent from the day Prime Minister Narendra Modi announced his ambitious plan to destroy black money holdings in the economy.
Meanwhile, traders enjoyed the bounce in Coal India, GAIL, Idea Cellular and Reliance Industries within the Nifty. Pharma shares continued to remain weak with Sun Pharma, Lupin and Cipla slipping a bit in trade. Also ticking lower were Hindustan Unilever, TCS and Kotak Bank.
Overall, the bulls were firmly in command of the market sentiment with 1,254 shares advancing compared with 260 that fell.
Strong volume action was seen in Ganesh Housing, Graphite India and ITI Ltd.

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