Sensex scores 180 on short covering in banks; ONGC up 4%

18 Jul 2013

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Equity benchmarks gained strength in late trade with the BSE Sensex gaining 180 points to close at 20128.41 on short covering in banks, capital goods and oil & gas stocks.

The 50-share NSE Nifty rose 64.75 points or 1.08 percent to finish at 6038.05.

Banks led the major support with the BSE Bankex gaining more than 2 percent after falling 7 percent in previous two sessions on RBI measures to curb rupee depreciation. HDFC Bank , the country's second largest private sector lender, gained more than 3 percent while its rivals State Bank of India and ICICI Bank gained 0.5-1 percent.

Axis Bank was one of the star performers today, rising nearly 4 percent after it reported 22 percent growth year-on-year in first quarter (April-June) net profit at Rs 1409 crore, aided by higher net interest income (NII).

Meanwhile, Kotak Mahindra Bank and IDBI Bank recouped losses in late trade after initial knee jerk reaction to first quarter results. Former closed flat while later gained 1.2 percent. Both banks' asset quality performance was weak.

All sectoral indices closed in green; the BSE Realty Index jumped 2.5 percent while Capital Goods gained 1.5 percent followed by Oil & Gas with 1.4 percent gains.

Shares of state-owned ONGC topped the buying list, soaring 4.4 percent after CLSA has upgraded the stock to a buy with a target price of Rs 360. ''Subsidy burden for ONGC and Oil India may continue to be determined under the FY12-13 formula of USD 56 per barrel, despite assumption of a decline in Brent crude price to USD 102 in FY14,'' CLSA report said.

Ahead of earnings today evening, Tata Consultancy Services , the country's largest software services exporter, lost 0.8 percent after hitting a record high of Rs 1695 on the BSE.

Lupin shares gained 1.9 percent and also touched a life-time high of Rs 904.95 after the pharma company entered into a strategic partnership with Merck to co-market the Pneumococcal vaccine.

4:00 pm Movers and losers: ONGC (up 4.2 percent),  HDFC Bank (up 3.2 percent), BHEL (3.1 percent), Hindalco (2.3 percent) and Hero Motocorp (up 2.3 percent) are top gainers of the day. Among laggards of the day are M&M, Sterlite Industries, NTPC , TCS and Bajaj Auto .

3:55 pm Index gainers: Bankex ended the day with a gain of 2 percent. Axis Bank , Bank of Baroda , Canara Bank , Federal Bank , Union Bank , Yes Bank , HDFC Bank surged between 3-4 percent. Among the midcaps, UCO Bank closed after rising 15 percent.

3:50 pm Market closing: It turned out to be a strong day for the market. After swinging around through the day, the Nifty saw a sudden surge in late trade to close well above 6000. The Nifty gained 64.75 points to close at 6038.05 while the Sensex ended at 20128.41, up 179.68 point. About 1201 shares have advanced, 1106 shares declined, and 180 shares are unchanged.

3:40 pm Order book: BEML has received order worth Rs 747 crore from Delhi metro, reports Reuters. The company says that order will boost order book position to Rs 6,400 crore. The stock closed up 2.4 percent on the BSE.

3:35 pm Results impact: Axis Bank closed up 3.8 percent, Kotak Mahindra (up 0.05 percent), IDBI Bank (up 1.2 percent), Bajaj Finance (down 2.5 percent), Bajaj Finserv (up 1 percent), Sasken Communication (up 5 percent), DB Corp (up 3.5 percent), Essar Port (up 2.7 percent), Info Edge India (up 10.3 percent) are some of the companies that announced first quarter earnings today.

3:30 pm Rupee outlook: Moody's Investors Service today said the rupee's depreciation will exacerbate inflationary and fiscal pressures, with both factors potentially constraining the country's sovereign rating.

India's recent measures to prop up the rupee may limit exchange rate volatility to some degree, but a sustained reversal in the rupee would require a significant narrowing of the trade deficit or large capital flows, Moody's added.

3:25 pm Alert: Axis Bank shoots 4 percent on back of strong April-June quarter earnings.

3:20 pm Update: Etihad Airways is working towards meeting a July 31 deadline to win regulatory approvals on its planned USD 379 million purchase of a stake in Jet Airways , the Abu Dhabi-based carrier said on Wednesday, reports Reuters.

Etihad, which is on an acquisition drive, agreed in April to buy a 24 percent stake in Jet in a deal that would provide India's largest carrier with a deep-pocketed global partner as well as cash to help pay off debts.

The market is rising higher on a clear bout of short covering. The Sensex is up 159.37 points at 20108.10, and the Nifty is up 56.40 points at 6029.70. About 1132 shares have advanced, 1085 shares declined, and 158 shares are unchanged.

Bankex (up 2.1 percent), Realty (up 2.7 percent) are lending support to the indices along with capital goods and oil gas stocks.

Axis Bank, the country's third largest private sector lender, pleased the street with the first quarter net profit rising 22 percent year-on-year to Rs 1,409 crore, sending shares 2.8 percent higher.

Net interest income increased higher-than-expected 31.4 percent to Rs 2865 crore from Rs 2180 crore during the same period.

Analysts on an average had expected the bank to report net profit at Rs 1398 crore and net interest income at Rs 2,744 crore.

03:00pm DB Corp beat the street with the first quarter consolidated net profit soaring 74.7 percent year-on-year to Rs 76 crore and total income rising 19 percent to Rs 449 crore. Analysts had expected it to report net profit at Rs 56 crore on total income of Rs 420 crore. The stock rallied 3 percent.

02:55pm Essar Ports shares gained 3 percent as its first quarter consolidated net profit increased to Rs 101.4 crore from Rs 68.5 crore and income from operations rose to Rs 399 crore from Rs 325 crore(YoY).

Increase in volumes and reduction in cost pushed the profits higher during the quarter. Cargo volume stood at 14.08 mt in Q1.

02:45pm Axis Bank , the country's third largest private sector lender, pleased the street with the first quarter net profit rising 22 percent year-on-year to Rs 1,409 crore, sending shares 2.8 percent higher.

Net interest income increased higher-than-expected 31.4 percent to Rs 2865 crore from Rs 2180 crore during the same period.

Analysts on an average had expected the bank to report net profit at Rs 1398 crore and net interest income at Rs 2,744 crore.

02:30pm The NSE Nifty reclaimed 6000 level again amid choppy trade, helped by Infosys and HDFC Bank that both gained over 1.6 percent.

The BSE Sensex is up 93.71 points at 20042.44, and the Nifty is up 27.55 points at 6000.85. Indian rupee depreciated by 27 paise to 59.61 against the dollar.

IDBI Bank shares fell 3 percent after net profit declined to Rs 307 crore in first quarter FY14 from Rs 427.3 crore in a year ago period. Gross non-performing asset (NPA) rose more than 100 basis points to 4.34 percent during April-June quarter from 3.22 percent in previous quarter.

Supreme Industries shares rose 1.6 percent as its consolidated net profit increased to Rs 109 crore in April-June quarter from Rs 95.2 crore in a year ago period.

1:55 pm Update: Taking its plans to develop coal blocks in the African nation forward, Coal India has started further exploration of its twin mines in Mozambique, reports PTI.

"The drilling (of blocks in Mozambique) has started in the first week of June, 2013. The selection of agency for further drilling of 30,000 metre was completed in May, 2013," Coal India informed an inter-ministerial panel in a meeting.

1:50 pm Expert views: Painting an extremely gloomy picture in an already slowing Indian economy, Prabodh Agarwal, head-institutional research, IIFL doesn't see economic or earnings recovery over 12 months.

He expects India Inc to witness single digit growth in FY14. "The worst of earnings downgrades are not out of the way yet. We may end the year with earnings growth falling to 4-5%," he said in an interview to CNBC-TV18,

Further, he added that the market is currently trading at a fair value of 14.5 times earnings. On specific stocks, Agarwal is cautious on HUL and is surprised by the sudden upmove seen in the stock on the back of MSCI and FTSE rebalancing .

M&M Financial Services is his top pick from the NBFC space. He is also betting on HCL Tech and Tech Mahindra from the IT sector.

1:45 pm Earnings: Info Edge's April-June quarter net profit has jumped to Rs 29.4 crore from Rs 6.3 crore quarter-on-quarter. Income from operations was at Rs 120.7 crore vs Rs 117 crore Q-o-Q. The stock is quoting at Rs 309.00, up Rs 21.80, or 7.59 percent on the BSE. 

1:40 pm Telecom talk: Reliance Communication is likely to cut 3G mobile data prices by almost half. The telecom operator is going to offer 1 GB 3G data at Rs 123/month. The stock is up around 2 percent on the BSE.

1:35 pm RBI's take: The RBI lets the exchange rate be market determined but intervenes to smooth volatility and prevent disruptions to macro-economic stability, Reserve Bank of India Governor Duvvuri Subbarao said in a speech in London on Wednesday, reports Reuters.

"We let our exchange rate be largely market determined, but intervene in the market to smooth excess volatility and/or to prevent disruptions to macroeconomic stability," Subbarao said, according to a copy of the speech posted on the RBI web site on Thursday.

Subbarao also said credible fiscal consolidation is a pre-condition for stabilising inflation and in securing non-inflationary growth.

1:30 am India Inc's reaction: A nervous industry braces itself for a rate hike. Naina Lal Kidwai, country head of HSBC, in an exclusive interview to CNBC-TV18 says the fear of an interest rate hike looms large but hopes the RBI will maintain status quo in its upcoming credit policy on the July 30. She also backs the proposal for global rupee bond in small tranches.

It is a flat day at the market as the Nifty is struggling below the 5900-level. The Nifty is up 5.60 points at 5978.90 while the Sensex is up 22.02 points at 19970.75. About 895 shares have advanced, 1130 shares declined, and 141 shares are unchanged.

While banks are the biggest drags for the third day, pharma and commodities support the index. The midcap index is flat as well, but individual names like Manappuram, Exide and Dabur are making some smart moves.

Private sector lender Kotak Mahindra Bank 's first quarter standalone profit after tax (PAT) rose higher-than-expected 43 percent year-on-year to Rs 403 crore, but jump in non-performing assets (NPA) and provisions capped the profitability of the bank.

Standalone net interest income (NII) grew by 27 percent Y-o-Y to Rs 917 crore, which was slightly lower than expectations. Analysts on an average had expected it to report standalone net profit at Rs 388 crore and NII at Rs 925 crore.

Sterlite is in focus as the Supreme Court has adjourned Sterlite vs TNPCB matter to Monday. The stock is down 2 percent on the BSE.

The bond market is cautious ahead of today's bonds sales under the OMO window. The RBI rejecting Rs 11,000 crore of bids in yesterday treasury bill auction puts a question mark over tomorrow's government bond auction.

12:55pm Reliance Communications says it has cut 3G mobile data prices by almost half. "We will offer 1 GB 3G data at Rs 123 per month," RComm says.

12:50pm From the midcap space, Nagarjuna Construction is buzzing today on reports that a unit of Sembcorp, backed by Temasek, is expected to buy a majority stake in the company's power projects for USD 250 million. The deal is expected to be signed in about a month. The stock is up 7 percent.

PE firm Blackstone will acquire a majority stake in Agile Electric Works, and its listed arm, Igarashi Motors . The deal is estimated at around USD 100 million. Agile and Blackstone will make an open offer for Igarashi Motors at Rs 65 apiece. Igarashi Motors is flying high with nearly 7 percent gains.

12:40pm Indraprastha Gas shares crashed 4 percent ahead of the supreme court hearing today on the IGL-PNGRB case. Remember, the government had filed an affidavit in supreme court, which said that the petroleum and natural gas regulatory board had no powers to fix the transmission fee.

From the pharma space, Lupin rallied 2.5 percent after it entered into a strategic partnership with Merck to co-market the Pneumococcal vaccine. The stock touched a record high of Rs 904.95.

European markets are flat in opening trade.

12:30pm JB Chemical shares gained 4.6 percent as the company reached settlement with Cilag GmbH and J&J LLC w.r.t sale of Russia-CIS OTC business.

Reliance Infrastructure entered into partnership with Innovari USA to launch Automatic Demand Response (ADR) scheme in Mumbai.

Technology bellwether TCS will report its first quarter numbers today. According to a CNBC-TB18 poll, dollar revenue growth is likely to be over 3 percent, while profits may rise 5 percent sequentially. However, margins could show a slight dip, closer to 26 percent. The stock is down over 1 percent after hitting a record high of Rs 1695 in early trade.

12:25pm The market is flat to positive in noon trade, but the Nifty is firmly holding above 5950. The midcap and smallcap indices too are quiet, but individual names like Manappuram, Exide Industries and Dabur India are making some smart moves, gaining 3-5 percent.

The BSE Sensex is up 34.29 points at 19983.02, and the Nifty is up 9.00 points at 5982.30.

The Indian rupee is trading lower by 31 paise to 59.71 against the dollar. Domestically there is good demand for dollars from PSU banks.

Indian bonds are up a tad and yields are down after the RBI rejected Rs 11,000 crore of bids in yesterday treasury bill auction. The RBI action has increased liquidity and put a question mark over tomorrow government bond auction. The market is, however, cautious ahead of today's bonds sales under the open market operation window.

Private sector lender Kotak Mahindra Bank's first quarter standalone profit after tax (PAT) rose higher-than-expected 3.9 percent year-on-year to Rs 403 crore, but jump in non-performing assets (NPA) and provisions capped the profitability of the bank. The stock is down 1.5 percent.

11:55 am Macro outlook: Asian Development Bank (ADB) recently downgraded India's FY14 growth forecast from 6 to 5.8 percent. Stalled projects, low industrial output and slowdown in import economies, like Europe are responsible for India's muted economy says ADB's economist, Abhijit Sen Gupta.

ADB could relook at this growth forecast as it has not factored in the recent measures taken by the Reserve Bank of India (RBI) which aimed at curbing rupee's fall. Gupta also cautioned that asset quality would worsen going into FY14 as well.

He further told CNBC-TV18 that India's recovery in the second of FY14 would depend on the rupee and monsoon.

11:45 am Earnings: Kotak Mahindra Bank has posted standalone profit-after-tax at Rs 403 crore in the April-June quarter compared to Rs 283 crore Y-o-Y. During the period, its net interest income (NII) was at Rs 917 crore.  The stock tanks 2.4 percent on the BSE.

11:40 am Earnings: Bajaj Finance's first quarter net profit rose 26.7 percent year-on-year to Rs 175.7 crore, but shares lost 3.5 percent to Rs 1,354.90 on the BSE.

Total income grew by 32.4 percent to Rs 928.3 crore in April-June quarter FY14 from Rs 701.3 crore reported in a year ago period.

Net interest income increased 36.9 percent Y-o-Y to Rs 552.3 crore from Rs 403.4 crore.

11:35 am Alert: Macquarie cuts India FY14 GDP growth forecast to 5.3 percent from 6.2 percent.

11:30 am Rupee impact: The rupee's slide to record lows is squeezing mid-sized companies that borrowed offshore when times were good, with a slowing economy now making it even harder for them to generate the extra funds needed to cover dollar payments, reports Reuters.

The rupee's slide to record lows is squeezing mid-sized companies that borrowed offshore when times were good, with a slowing economy now making it even harder for them to generate the extra funds needed to cover dollar payments.

11:20 am Gainers and losers: ONGC , BHEL , Hindalco , Jindal Steel and Infosys are top gainers in the Sensex. Losers include M&M, ICICI Bank , Sterlite Industries and Coal India .

After an initial hiccup, the Sensex manages to reclaim 20000 level as healthcare and realty stocks lend support. However, banks, metals and autos are still under selling pressure. The Sensex is up 63.16 points at 20011.89. The Nifty, meanwhile, is below 6000 at 5990, up 16.55 points. About 829 shares have advanced, 800 shares declined, and 102 shares are unchanged.

Sugar stocks are higher today, stocks like Dhampur and Shree Renuka are up 3-7 percent.

Asian markets are mixed on Federal Reserve Chairman Ben Bernanke comments and china growth risks. Nikkei is up 0.5 percent. China is under pressure on more property curbs after average new home prices for June have jumped 6.8 percent year-on-year. Additionally, IMF said yesterday that China's growth this year will fall short of their 7.75 percent estimate.

The rupee is lower as are most Asian currencies vis a vis the dollar. Domestically there is good demand for dollars from PSU banks.

Indian bonds are up a tad and yields are down after the  RBI rejected Rs 11,000 crore of bids in yesterday treasury bill auction. The RBI action has increased liquidity and put a question mark over tomorrow's government bond auction. The market is, however, cautious ahead of today's bonds sales under the OMO window.

Asian markets are mixed on Federal Reserve Chairman Ben Bernanke comments and china growth risks. Nikkei is up 0.5 percent. China is under pressure on more property curbs after average new home prices for June have jumped 6.8 percent year-on-year. Additionally, IMF said yesterday that China's growth this year will fall short of their 7.75 percent estimate.

In commodites space, Brent hovers around USD 108.5, Nymex at USD 106.5. Gold retreats marginally to USD 1278 per ounce.

10:55am AP Verma, General Manager-Finance of Kalindee Rail says that Texmaco Rail may make open offer going ahead. "The management control may change going ahead, he adds.

Texmaco currently holds 24.9 percent stake in Kalindee Rail.

Meanwhile, Jupiter Metal makes an offer to acquire 37,19,200 equity shares, being 30 percent of the present paid up and voting capital of the Kalindee Rail at a price of Rs 65 apiece. The open offer will open on September 3 and close on September 17.

10:45am Igarashi Motors shares surged over 8 percent after private equity firm Blackstone has acquired auto components company Agile Electric Works along with its listed subsidiary Igarashi Motors for Rs 660 crore. In a two-legged transaction, Blackstone will pick up 98 percent of the parent and this transaction will also trigger an open offer for an additional 26 percent stake in Igarashi Motors at Rs 65 apiece.

10:35am Gujarat Pipavav gained nearly 2 percent after promoter revoked a pledge on 20.7 crore shares of the company.

Supreme Petrochem rallied more than 4 percent, reacting to first quarter earnings. Net profit of the company grew 2.8 times year-on-year to Rs 13 crore and net sales rose by 26.5 percent Y-o-Y to Rs 755 crore during April-June quarter.

Equity benchmarks came off day's high, weighed down by banks and select auto stocks. Index heavyweight Reliance Industries declined 0.5 percent while Tata Motors lost 1.6 percent.

Utility vehicle maker Mahindra & Mahindra plunged more than 3 percent.

Banks remained under pressure for the third straight day on RBI measures to curb rupee volatility. ICICI Bank shares slipped 2 percent while State Bank of India fell 0.76 percent.

10:25am Nagarjuna Construction Company ( NCC ) shares rallied nearly 6% on a media report that a unit of Sembcorp, which is backed by Singapore investor Temasek Holding, is expected to buy a majority stake in NCC power projects for USD 250 million (about Rs 1500 crore ).

The deal is expected to be signed in about a month, the report said. NCC power projects is a joint venture between NCC and Gayatri Projects , and is developing a 1,320mw coal-based thermal power project in Andhra's Nellore district.

10:15am HDFC Bank is flat. Citi is neutral on the stock with a target price of Rs 750. The brokerage house believes the bank is now structurally operating at a core operating profit growth level of about 25 percent, not its 30 percent headline level. "It does have some earnings kickers like operating costs and distribution leverage," Citi report said.

Exide Industries shares rose 2 percent as Morgan Stanely has upgraded the stock to overweight and raised its target price to Rs 149. "Replacement demand is showing signs of recovery, and Exide with capacities and dealer network is well placed to benefit," Morgan Stanley report said.

10:05am Indian equity benchmarks continue to trade higher despite mixed Asian cues, supported by technology, FMCG, healthcare and capital goods stocks. ONGC gained 2.8 percent as CLSA upgraded the stock to a buy with a target price of Rs 360.

The BSE Sensex is up 96.59 points at 20045.32, and the Nifty is up 22 points at 5995.30. Advancing shares outnumbered declining ones by 702 to 454 on the Bombay Stock Exchange.

Indian rupee fell 43 paise to 59.77 against the US dollar, continuing its fall for the second consecutive session today after seeing sharp appreciation on Tuesday due to RBI measures.

TCS gained marginally ahead of its first quarter earnings today evening. Analysts on an average expect the profit after tax to grow by 5.3 percent quarter-on-quarter to Rs 3,787 crore .

9:50 am Take on Bernanke: In an interview on CNBC-TV18, James Glassman, Senior Economist, JPMorgan Chase Bank, says Ben Bernanke's statement is more of a reassuring message . Bernanke said on Wednesday that he still expects to start scaling back its bond purchase programme later this year, but left open the option of changing that plan if the economic outlook shifted.

Glassman says, this message was for those who thought that this is going to happen regardless. He says the markets are getting used to the idea and realize that the Fed is not planning to do something that would hamper recovery. He believes the Fed is talking about tapering only because it feels further asset purchases won't be necessary if the economy is on the process of recovering. "So, it is not a very different message, but it is a little more cautious," he adds.

9:45 am Alert: A panel of ministers, headed by Finance Minister P Chidambaram clears disinvestment of 3.56 percent stake in Neyveli Lignite  through institutional placement programme (IPP) and the issue is likely in the first week of August.

The Department of Disinvestment (DoD) had originally planned to divest 5 percent of its stake in the Tamil Nadu-based mining company. The Cabinet had last month approved the same.

9:35 am Movers: M&M, NTPC , Sterlite Industries, ICICI Bank and Tata Motors are top losers in the Sensex. On the gaining side are ONGC , Hindalco , Jindal Steel , Cipla , Tata Power .

9:30 am FII view: Though markets are euphoric about Ben Bernanke's testimony onFed tapering Arvind Sanger, Managing Partner, Geosphere Capital Management feels it was relatively benign . Talking about India, he says that the market has passed the stage of major liquidity outflow. Sanger is also optimistic that rupee may head back to 58 per dollar.

9:27 am Market check: Just a while later after opening, the Nifty manages to scale back 6000, gaining 30 points at 6003.55 while the Sensex too adds 107 points at 20056.

The market has opened on a flat note ahead of key earnings expected today. The Nifty opens below the 6000-mark at 5984.70, up 11.40 points while the Sensex adds 23.34 points at 19972.07. About 227 shares have advanced, 74 shares declined, and 30 shares are unchanged.

On Thursday the Indian rupee opened lower by 26 paise at 59.60 per dollar against 59.34 Wednesday.

Agam Gupta, Standard Chartered Bank said, "Ben Bernanke's speech was slightly more dovish than the market expected. It will keep the rupee stable and also check the dollar from strengthening further. The market will continue to focus on the impact of recent RBI moves and watch out for any further measures. The range for the day is seen between 59.15-59.55/USD."

In big earnings today, TCS reports its April-June quarter results. In a CNBC-TV18 poll, dollar revenue growth is seen up 3 percent at USD 3142 million. Profits may grow 5 percent quarter-on-quarter but margins could come slightly lower.

A steady set of numbers is expected from Kotak Mahindra Bank . On a standalone basis, net interest income may see 28 percent growth and margins could be around 4.5 percent. Meanwhile Axis Bank may see 26 percent net interest income growth and margins could come in flat.

Other company which are expected to announce first quarter earnings today are IDBI Bank , Axis Bank, Mind Tree, DB Corp , Rallis India , Bajaj Finserv , Bajaj Finance , Sasken, Supreme Inds, VGuard, Essar Ports , GCCL Infra, Honeywell Auto, Info Edge , Infotech ENT, Ingersoll Rand , Magma Fin, Blue Star Info and VTM.

On the global front, US markets ended modestly higher on Wednesday after Federal Reserve Chairman Ben Bernanke said the timeline for winding down the central bank's stimulus program was not set in stone and the timeline depended on the economic outlook. He made the comments on Wednesday before the House Financial Services Committee as part of his twice-yearly report to Congress on monetary policy. On Thursday, he will appear before the Senate Banking Committee.

Asian markets are trading mixed. Shanghai, though, is down nearly 1 percent. Average new home prices for June have jumped 6.8 percent year-on-year, higher than a forecast for a 6 percent gain. Property shares are cracking on fears of more property curbs to tame prices. Elsewhere, Nikkei has hit an 8-week high while Kospi is weighed down by renewed weakness in yen.

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