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The Bombay Stock Exchange.IANS

5.05 PM IST: Benchmark indices closed with gains on Wednesday driven by robust car sales for February 2017 and better-than-expected third quarter GDP data on Tuesday. Top Sensex gainers were HDFC, Tata Steel, Mahindra and Dr Reddy's Laboratories. The Sensex closed 241 points higher at 28,984 and the NSE Nifty gained 66 points to end at 8,945.

Read: Domestic car sales February 2017: Maruti Suzuki, Hyundai, Renault, Ford, Honda, Nissan, TKM report growth; Mahindra sees decline

However, concerns have been raised on the GDP numbers released by the government on Tuesday evening.

"Private consumption, fixed investment and industrial output growth all accelerated in Q4 (December 2016 quarter), with only the services sector witnessing a slowdown. This does not add up. High frequency real activity data released since demonetisation suggest that consumption and services were hit after demonetisation because they are more cash-intensive," Sonal Varma, analyst at Nomura, said in a note.

9.41 AM IST: Markets opened on a positive note on Wednesday tracking Asian equities and a slew of stock-specific news, in addition to better-than-expected December quarter (Q3) data. The BSE Sensex was up 217 points at 28,960 at around 9.46 am while the NSE Nifty was trading with gains of 60 points at 8,939.

Axis Bank, Hero Motocorp, Power Grid Corporation were leading the Sensex rally.

HDFC was up on news that the mortgage lender's board will meet to Friday to consider interim dividend for which the company has fixed March 11 as the record date.

HPCL went ex-dividend on Wednesday; the state-run oil marketing company had declared Rs 22.50 per share as interim dividend for FY2017.

Hero Motocorp's board will be meeting on March 11 to consider interim dividend for the current fiscal.

Benchmark indices Sensex and Nifty could open on a positive note on Wednesday (March 1) on the back of third quarter GDP growth rate that came in at seven per cent, higher than analysts's expectations. Market sentiments would also be guided by February's volume sale data to be reported by auto firms.  

Read: PM Modi's note ban pulls down India's GDP growth rate to 7% in December quarter

The seven per cent growth rate in December 2016 quarter and the projection of 7.1 per cent for FY2017 means India will retain its position as the fastest-growing economy in the world and remain ahead of China.

Maruti Suzuki India Ltd. (MSIL), Ashok Leyland, Tata Motors, Mahindra and Mahindra (M&M) Bajaj Auto, TVS Motor, Eicher Motors and Hero Motocorp are expected to report their February volume sale. 

Car sale had grown by 10.83 per cent in January 2017 but two-wheeler sales plunged 7.39 per cent. Commercial vehicle sale remained almost flat.

For February 2017, MSIL is expected to post 20 per cent growth in domestic sale while M&M is projected to report 14 per cent decline, according to an update by Nomura Research.

Hero Motocorp (HMCL), Bajaj Auto and TVS Motor could see yet another disappointing month while Royal Enfield sale is likely to maintain the momentum of high growth.

"We expect HMCL to be impacted worst, with a ~14 percent decline. For Bajaj Auto (BJAUT IN, Neutral), we expect 11 per cent yoy decline in domestic motorcycles. Exports (+15 per cent yoy) should be better – on a low base leading to a ~3 per cent decline in overall volumes. Royal Enfield should see healthy ~24 per cent yoy growth. TVS' overall volumes are also likely to decline ~1 per cent yoy," the Nomura update said.

Commercial vehicle sale is likely to have grown at six per cent "supported by moderate pre-buying as prices are likely to rise (~5-6 percent) from April 2017 onwards as BS-4 emission norms become mandatory," the Japanese brokerage said.

On Tuesday (February 28), the BSE Sensex closed 70 points lower at 28,743 while the NSE Nifty ended 17 points down at 8,879. Top Sensex losers were Coal India, Bajaj Auto and NTPC while index stocks that gained include Bharti Airtel, Asian Paints and Adani Ports.

Foreign portfolio investors (FPIs) were net buyers of Indian equities at Rs 1,146 crore and domestic institutional investors bought stocks worth Rs 268 crore, according to provisional data released by the National Stock Exchange.

The Indian rupee closed 2 paise higher at 66.69 to the US dollar on Tuesday.