In an otherwise rangebound market, auto stocks witnessed some buying following the transport minister Nitin Gadkari’s statement that besides working on some sops to auto industry the government has no plan to ban diesel and petrol vehicles.

The Nifty Auto of National Stock Exchange in morning trade in Dalal Street today rose 2 per cent to 6,901.75 (+139.70) points as major auto companies Maruti Suzuki, Mahindra, Tata Motors and Hero Motocorp witnessed buying interest from market participants. Mr Gadkari has also said that he would soon meet the finance minister Nirmala Sitharaman and take up the demand for cuts in GST on vehicles sales and financial sops for the auto industry.

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However, the transport minister said automakers must explore the possibilities of starting their own financing wings for better sales. He wants incentive for the industry to promote exports. The transport minister’s statement followed Reserve Bank of India’s directive to banks to link their rates of retain loans with external benchmarks from 1 October to ensure speedy transmission of cuts announced by it in its repo rate.

Meanwhile, the Sensex closed for the day at 36,644.42 (-80.32) points, down 0.22 per cent with 18 shares in green and 12 in red. Nifty was 0.03 per cent up at 10,847.90 (+3.25) points as 34 stocks moved up and 16 down. Nifty Auto, the star performer of the day, ended 2.06 per cent higher at 6,921.75 (+139.70) points. Gainers in BSE benchmark included Tata Motors at Rs 118.30, up 8.04 per cent; ONGC at Rs 125.45, up 5.98 per cent; Maruti Suzuki at Rs 5,985, up 2.66 per cent and M&M at Rs 518, up 2.37 per cent.

Bank shares again came under selling pressure losing their previous day’s gains. ICICI Bank, State Bank of India, HDFC etc were the top laggards weighing on the 30- share Sensitive Index of Bombay Stock Exchange and 50- scrip Nifty of NSE. Analysts say irrespective of the government’s measures to perk up market sentiment by announcing new policy measures, the two benchmarks are not showing signs of reversing the bearish trend. India Ratings Research in a note said the FPIs are unlikely to change their stance in near to medium-term.

Headwinds to economy persist despite softening of policy stance. In the first two sessions of trade in September, FPIs are net sellers of Rs 3,754.60 crore worth shares while DIIs net invested Rs 2,355.93 crore in shares.

The state owned ONGC’s share today jumped more than 9 per cent to Rs 128.60 in the opening trade after the company clarified in a filing to two exchanges saying: “All our efforts were made to control the situation and the fire was brought under control within a short span of time with internal safety provisions aided by mutual aid resource group (MARD).

Expects no impact on gas sales in Q2FY 2019/20”. Besides analysts see a major role of ONGC in a trade agreement between India and Russia signed during Prime Minister Narendra Modi’s visit to Russia. Both the sides envisage a rise in mutual trade to $30 billion by 2025 from $11 billion now. The trade agreement focuses on energy sector say analysts.