Sensex closes at record high; FMCG, healthcare stocks rally

Healthcare and FMCG shares lifted the Sensex 104 points to its highest ever closing of 21033.97 on Wednesday, overriding concerns in the real economy. The BSE bellwether is now just 172.8 points shy of its record high of 21206.77 seen in January 2008 at the peak of the bull run before the global financial crisis.

Dealers said the ongoing rally continues to be driven by liquidity and technical factors ahead of the derivatives expiry Thursday. The 50-share Nifty climbed 30.80 points to close at 6251.70. Bank shares failed to capitalise on Tuesday's momentum, and mostly closed flat to lower. Tepid numbers from Oriental Bank of Commerce and IDBI Bank dragged these stocks around 4 percent lower. Bank of India was the other big loser in the sector, shedding around 4 percent. Buyers turned their attention to defensive shares instead.

Nilesh Shah of Envision Capital said investors were better off sticking with defensive stocks even as the economy is showing signs of stability. ''There are already signs of stability in the economy but the trend is yet to be established. So the upside from here on the markets is going to be really more a function of liquidity,'' he said in an interview to CNBC-TV18 earlier in the day. In important earnings announcements today, Bharti Airtel surprised the street with better than expected revenues and operating margins . Net profit missed estimates because of forex and exceptional losses.

The stock gained over 5 percent to close at Rs 359. Brokers feel the pace of the uptrend could moderate hereon as news from the real economy is likely to be somber. The pressure on the rupee has abated somewhat, but other macro-indicators like inflation, industrial output and fiscal deficit continue to present a gloomy picture. The RBI raised the repo rate by 25 basis points at its policy meeting Tuesday, and warned of more hikes if inflation continued to stay high. Most economists are expecting another 25-basis point increase before the RBI decides to pause its hikes.

"The policy communiqué remains unequivocal on the inflation pressures and hence we expect the RBI to hike the repo rate by another 25 bps to 8% on December 18 before it can contemplate any pause,'' said brokerage house Kotak Securities in its note to clients today. Market is betting that easy global liquidity will cushion equities against a steep decline.

''Now, we are expecting tapering no earlier than March when Chairwoman Janet Yellen takes the helm of the Fed. We should expect fairly benign liquidity scenario midterm, punctuated by spikes of volatility as the market contemplates the notion of rate normalization,'' said Masha Gordon of PIMCO in an interview to CNBC-TV18. Foreign institutional investors have net bought around Rs 15,000 crore of shares so far this month (including Tuesday's provisional figure), but the uptrend in benchmark indices has slowed over the last couple of weeks.

3:50 pm Market closing (final): Marking a blockbuster rally, the Sensex ended up 104.96 points at 21033.97. The Nifty ended at 6251.70, up 30.80 points.  About 1259 shares have advanced, 1153 shares declined, and 178 shares are unchanged. Pharma and FMCG stocks were big gainers in today's trade while some auto stocks were under selling presurre. Index heavyweights Wipro, SBI and HDFC Bank were biggest losers in the Sensex.

3:40 pm Gold check: Gold edged higher on Wednesday as investors bet the Federal Reserve would stick to its bullion-friendly stimulus measures but the metal was still trading below five-week highs as a stronger dollar kept gains in check, reports Reuters. Gold has gained about 7 percent from a three-month low hit on October 15 on hopes that weak US data and the repercussions of budget battles in Washington would prompt the Fed to delay the winding-down of its USD 85 billion monthly bond purchases.

3:30 pm Market closing (provisional): The Sensex ends at a record closing high and is only 185 points away from the all-time high of 21206.77. The Nifty ends at 6251, up 30 points.

3:20 pm Management interview: Anant Gawande, CFO, Talwalkars, says the company managed to post good numbers in September despite facing a very tough quarter. Talwalkars has guided for 25-30 percent bottomline growth in FY14. For the first time since its IPO, Talwarkars has become net cash positive, which resulted in it cutting down debt. The fitness chain is now going to focus on value added products such as Zumba, spa, etc, which was not touched for the past three months. Don't miss: Havells India Q2 beats street, PAT up 44.5% to Rs 125.7cr The market is speeding up its race to test an all-time high. The Sensex is up 114.95 points at 21043.96, and the Nifty adds 35.35 points at 6256.25. About 1187 shares have advanced, 1135 shares declined, and 154 shares are unchanged. Bharti Airtel (up 6.2 percent) continues to be the biggest gainer in the Sensex, followed by Dr Reddy's Labs, Hindalco, BHEL and ICICI Bank. Wipro, Sesa Sterlite, SBI, L&T and Tata Power are losers in the Sensex. Lupin is up over 1 percent. Its September quarter net profit increased 39.8 percent on yearly basis to Rs 406 crore, driven by other income, despite higher tax rate. Consolidated revenue of the company grew 16 percent year-on-year to Rs 2,668 crore in quarter ended September 2013, supported by formulations business and strong growth US, Europe & Africa.

02:59pm Market Update The Sensex continued to hold the 21000-mark, gaining 94.24 points to 21023.25 while the Nifty rose 27.60 points to 6248.50. Index heavyweights ITC and HDFC rallied 1.5 percent and 1.2 percent, respectively. Bharti Airtel is the star with 6 percent upmove after strong Q2 earnings followed by ICICI Bank, Dr Reddys Labs, Hindalco Industries and BHEL with 2-4 percent gains. However, HDFC Bank, Infosys, State Bank of India, Sesa Sterlite, L&T, Wipro and Tata Motors lost 0.5-2 percent.

2:50pm Gold Update Gold edged higher on Wednesday as investors bet the Federal Reserve would stick to its bullion-friendly stimulus measures but the metal was still trading below five-week highs as a stronger dollar kept gains in check. Gold has gained about 7 percent from a three-month low hit on October 15 on hopes that weak US data and the repercussions of budget battles in Washington would prompt the Fed to delay the winding-down of its USD 85 billion monthly bond purchases. Spot gold ticked up 0.2 percent to USD 1,346.11 an ounce at 0702 GMT after hitting a session low of USD 1,339.14 earlier, reports Reuters.

2:41pm Talwalkars Boardroom Talwalkars managed to post rather good set of numbers in the September quarter. Its total income is up 24 percent and net profit rose 20 percent. The company saw good growth in the EBITDA performance as well. Anant Gawande, CFO, Talwalkars, says the company managed to post good numbers despite facing a very tough quarter. Talwalkars has guided for 25-30 percent bottomline growth in FY14. For the first time since its IPO, Talwarkars has become net cash positive, which resulted in it cutting down debt. The fitness chain is now going to focus on value added products such as Zumba, Spa, etc., which was not touched for the past three months.

2:10pm Nifty above 6250 The market extended gains in afternoon trade with the Nifty reclaiming 6250 level and the Sensex climbing above 21000-mark. The Sensex is up 148.51 points at 21077.52, and the Nifty is up 46.20 points at 6267.10. Bharti Airtel shares surged 6 percent after reporting strong revenues and improvement in Africa business during Second quarter. ICICI Bank rallied 2.5 percent, in addition to previous day's 6 percent rally. Lupin gained nearly 2 percent post September quarter earnings. Pharmaceutical firm matched Dalal Street expectations with the second quarter consolidated net profit increasing 39.8 percent on yearly basis to Rs 406 crore, driven by other income, despite higher tax rate. Consolidated revenue of the company grew 16 percent year-on-year to Rs 2,668 crore in three-month period ended September 2013, supported by formulations business and strong growth US, Europe & Africa. "Despite challenges in markets like India, we have had a good first half, driven by strong business growth from markets like US and improved operational efficiencies," Nilesh Gupta, MD, Lupin said.

1:55 pm Analyst's views on Bharti's Q2 results: Although the revenues from African business contributed to the second quarter performance of Bharti Airtel , it is not going to be a very substantial contributor to the numbers going forward, believes Sanjay Chawla, JM Financial. The revenue surprise in the Q2 basically came in from non-mobile business both from India and Africa , he adds. The margins for Q3 will remain at current levels but sees strong improvement in Q4. The margins in Q2 stood at around 32 percent.

1:40 pm International result: Honda Motor second-quarter net profit rose 46 percent, slightly less than expected, after strong car sales in its biggest market, the United States, and motorbike sales in India and Thailand. Japan's third-biggest automaker by sales volume said its July-September net profit totalled 120.4 billion yen, compared with 82.2 billion yen a year ago. For the financial year ending in March 2014, Honda stuck to its forecast of 580 billion yen in net profit, below expectations of 610.8 billion yen in a Thomson Reuters  survey of 21 analysts.

1:30 pm Management interview: The anti-dumping duty on Chinese Paracetamol would benefit the Indian pharma industry but it could also result in 5-10 percent price increase, says Dr Habil F Khorakiwala, Founder Chairman & Group CEO, Wockhardt in an interview to CNBC-TV18. "Chinese tendency has been that when they dump, they get manufacturers out of the system and then they raise the prices significantly," he adds Paracetamol is a very important anti-fever and painkiller, which has a large domestic production. India consumes about 10,000 tonnes of the drug in one year, he adds. According to him the anti dumping duty is for active pharmaceutical ingredients (API), the bulk drug of Paracetamol.

The market is consolidation phase just ahead of the F&O expiry tomorrow.  The Sensex is up 83.47 points at 21012.48, and the Nifty is up 25.95 points at 6246.85. About 1139 shares have advanced, 1066 shares declined, and 162 shares are unchanged. Boosted by a strong September quarter performance, Bharti Airtel continues to be the biggest gainer in the Sensex, followed by Dr Reddy's Labs, BHEL, ICICI Bank and Bajaj Auto. Financial Tech surged 8 percent and MCX gained 4 percent  after NSEL stated that Mohan India has agreed to arrange for Rs 771 crore as final settlement. Wipro, M&M, Sesa Sterlite, L&T and Tata Power are laggards. Tirthankar Patnaik, Religare Capital Markets feels that the market may make an all-time high before the year ends given how global conditions have panned out quite favourable for India.

12:59pm Market Update The market remained marginally higher in afternoon trade. The Sensex is up 55.23 points at 20984.24, and the Nifty is up 16.75 points at 6237.65. Foreign institutional investors have bought more than Rs 15,000 crore worth of equity shares during October so far (including Tuesday's provisional figure).

12:40pm Oriental Bank of Commerce falls 2% Public sector lender Oriental Bank of Commerce's (OBC) second quarter (July-September) net profit fell 17 percent year-on-year to Rs 251 crore, impacted by higher provisions while asset quality deteriorated further. Net interest income (the difference between interest earned and expended) increased 10.7 percent on yearly basis to Rs 1,281 crore in three-month period ended September 2013. Provisions and contingencies climbed 3.3 percent sequentially (up 19.7 percent year-on-year) to Rs 550.5 crore in the quarter gone by.

12:28pm Brigade Boardroom In an interview to CNBC-TV18, MR Jaishankar, CMD, Brigade Enterprise said, the company's performance in terms of revenue in the second quarter was similar to the previous quarter, but H2FY14 is likely to be substantially better for the real estate developer. The company's revenue in Q2FY14 stood at Rs 171.50 crore versus Rs 184.50 crore, year-on-year (Y-o-Y). Its EBITDA in Q2 fell marginally to Rs 47.20 crore versus Rs 47.40 crore (Y-o-Y). Profit after tax rose to Rs 19 crore against Rs 14.80 crore (Y-o-Y).

12:14pm The market is marginally higher in noon trade with the Nifty holding the 6200 level supported by ICICI Bank and Bharti Airtel . Housing finance company HDFC too is supportive with 1.3 percent gains.  The Sensex is up 58.65 points at 20987.66, and the Nifty is up 14.40 points at 6235.30. About 1064 shares have advanced while 875 shares declined on the BSE. Market expert Sandip Sabharwal says the market is likely to move further 6-8 percent for the remainder of the year. "December has been very good for the market. December average returns are 4-5 percent. I think mostly Fed is not going to taper and that will lead to upgrades going forward," he told CNBC-TV18. Top private sector lender ICICI Bank rallied 2.6 percent today on top of a 6 percent upmove seen in previous session while Bharti Airtel surged over 4 percent on strong operational performance and better-than-expected revenues during September quarter. Havells India shares surged nearly 8 percent as electrical products manufacturer beat analysts' expectations on every parameter with second quarter (July-September) standalone profit after tax rising a whopping 44.5 percent year-on-year to Rs 125.7 crore, driven by sales growth in all segments. However, the laggards are M&M (down 2 percent), Infosys , Wipro (down 2.5 percent), ITC , L&T, Tata Motors and HDFC Bank .

12:00 pm FII view: Fed's dovish stand, which points to a more benign liquidity environment, is pushing foreign institutional investors (FIIs) towards India, says Sunil Garg of JP Morgan. Apart from the global factors, country-specific factors such as the Reserve Bank governor Raghuram Rajan's move towards easing liquidity-including yesterday's normalising the corridor between repo rate and MSF is giving the market a lot more confidence, he says. Governor Rajan's actions are a major reason behind FIIs bringing in money here, he adds.

11:50 am Brokerage view: JP Morgan downgraded L&T to "neutral" from "overweight" and maintained its target price of Rs 970, saying the current share price adequately discounts near-term positives. The investment bank added it remains wary of risks associated with deteriorating working capital, higher-than-expected margin drag on overseas orders and a rise in the proportion of slow-moving order.

11:35 am Results poll: Jindal Steel & Power (JSPL) will announce its second quarter (July-September) earnings today. According to a CNBC-TV18 poll, analysts on an average expect profit after tax to fall 33.6 percent year-on-year to Rs 596 crore during the quarter. Net sales are seen going up 1 percent to Rs 4,645 crore in three-month period ended September 2013 from Rs 4,607 crore in a year ago period. Analysts feel steel performance of the company may improve on the back of higher sales volumes, but power business may drag during the quarter.

11:20 am Market outlook: Nilesh Shah of Envision Capital suggests sticking to defensive stocks. In an interview with CNBC-TV18, he says an uptick in earnings is not yet underway and near-term market trend would be decided largely by liquidity. "There are already signs of stability in the economy but the trend is yet to be established. The markets is going to be really more a function of liquidity," he says. Shah is bullish on IT, pharma and select automobile stocks. He likes FMCG names too, but advises investors to steer clear of large caps like HUL and ITC as he feels valuations are too expensive. He is also negative on high beta stocks, especially state-owned banks and predicts that the worst may not be over for them yet.

The market is going steady ahead of the F&O expiry. The Sensex is up 65.27 points at 20994.28, and the Nifty up is 20.40 points at 6241.30. About 979 shares have advanced, 712 shares declined, and 98 shares are unchanged. Bharti, BHEL, Dr Reddy's Labs, ICICI Bank and Bajaj Auto are top gainers. Among the top losers are Wipro, M&M, Tata Power, Sesa Sterlite and ONGC. Asian markets rose taking cue from the strength in the US equities and ahead of the conclusion of the US FOMC meet. Gold was below five-week highs on Wednesday ahead of Fed meeting outcome. Rupee has weakened as foreign banks are buying dollars tracking weakness in euro and some Asian units. Positive local equities restrict further losses.  Bonds are slightly lower on profit booking prices also under pressure before gilt auction Friday.

10:50am Stocks In News Ranbaxy Labs trimmed early losses from 6 percent to 0.35 percent on short covering. It reported a disappointing set of numbers during September quarter. Bank of America Merrill Lynch has maintained an underperform stance on the stock with a target price of Rs 340 and has lowered its CY13 earnings per share by 8 percent on the back of limited pipeline visibility which will continue to weigh on valuations. Tata Communications surged over 8 percent after reporting strong results. Infact it's the first profitable quarter for the company since FY09, adjusted for exceptional gain last quarter. Margins expanded by around 590 basis points in the last two quarters. Religare raised FY14/FY15 EBITDA by 6 percent and increased target price to Rs 400 from Rs 200 earlier. Financial Technologies rallied 11 percent and MCX rose 4 percent after NSEL stated that Mohan India has agreed to arrange for Rs 771 crore as final settlement. Mohan India has made a down payment of Rs 11 crore and will pay the balance in next 1 year. The payment is securitised by land & property owned by Mohan India group as collaterals.

10:35am Market Expert Fed's dovish stand, which points to a more benign liquidity environment, is pushing Foreign Institutional Investors (FIIs) towards India, says Sunil Garg of JPMorgan. Apart from the global factors, country-specific factors such as the Reserve Bank governor Raghuram Rajan's move towards easing liquidity including yesterday's normalising the corridor between repo rate and MSF is giving the market a lot more confidence, he says. Governor Rajan's actions are a major reason behind FIIs bringing in money here, he adds.

10:25am The market is volatile ahead of expiry tomorrow with both the equity benchmarks hovering around previous closing values. The Sensex is up 53.62 points at 20982.63, and the Nifty is up 15.25 points at 6236.15. Advancing shares outpaced declining ones by 748 to 483 on the BSE. Telecom operator Bharti Airtel rallied more than 4 percent after second quarter earnings. Revenues and operational performance of the company was strong in September quarter while profit fell due to forex loss. Even its Africa division improved its performance in the quarter gone by. ICICI Bank gained another one percent on top of a 6 percent rally seen in previous session.

10:00 am Budget expectation: The Direct Taxes Code Bill, which seeks to replace the archaic Income Tax Act, is likely to be placed in Parliament during the winter session, Finance Minister P Chidambaram said. The winter session may start in early December, after the completion of assembly elections in five states. The final draft of the DTC Bill, which has to be vetted by the Cabinet, keeps the income tax exemption limit unchanged at Rs 2 lakh for individuals. It proposes to introduce a fourth slab with a 35 percent tax rate for those with an annual income of over Rs 10 crore.

9:50 am Buzzer: Shares of Tata Communications jumps around 9 percent on the back of a profitable September quarter, largely boosted by growth in managed services and voice offerings. Its net profit stood at Rs 80.36 crore in the quarter ended September 30, 2013 against a loss of Rs 274.24 crore year-on-year. Total income of the company rose 15.95 percent to Rs 4,952.61 crore for the reported period as compared to Rs 4,270.99 crore last year. Gross revenues for Tata Communications' core business rose by 17 percent to Rs 4,418.7 crore against Rs. 3,784 crore during the corresponding quarter of the previous fiscal year (FY13).

9:40 am Update: Bombay Stock Exchange (BSE) will exclude Jignesh Shah-led Financial Technologies (FTIL) from trading in the securities lending and borrowing (SLB) segment with effect from November 8. The SLB mechanism allows short sellers to borrow securities for making delivery. According to market regulator Securities and Exchange Board of India (Sebi) guidelines, shares with an average monthly trading turnover of Rs 100 crore or more in the previous six months are eligible for trading in SLB segment.

9:30 am Buzzer: Shares of Ranbaxy falls around 5 percent as it posted a net loss of Rs 454 crore in quarter ended September 2013 as against profit of Rs 754 crore in a year ago period, dented largely by forex loss of Rs 302.2 crore. There was a forex loss of Rs 360 crore, but out of that the company added only Rs 302.2 crore to profit and loss account for the quarter. Profit was also impacted by Mohali stock write off and other charges of Rs 69.5 crore, finance cost of Rs 111 crore and impairment loss on vaccine plant in Bangalore due to prevalent market conditions.

After a blockbuster rally on Tuesday, the market has opened in the positive territory today. The Sensex is up 44.47 points at 20973.48, and the Nifty is up 9.75 points at 6230.65. About 259 shares have advanced, 62 shares declined, and 8 shares are unchanged. Telecom operator Bharti Airtel missed street expectations with net profit falling 25.7 percent quarter-on-quarter to Rs 512 crore, dented by forex loss. It reported a forex loss of Rs 342 crore due to continued depreciation of rupee during the quarter. Numbers, barring net profit, were higher than analysts' forecast. Revenues increased 5.2 percent sequentially to Rs 21,324 crore in three-month period ended September 2013.

The stock is up 4 percent on the BSE. Among the other gainers are BHEL, ICICI Bank, Dr Reddy's Labs and Bajaj Auto. Top losers in the Sensex are Wipro, Sesa Sterlite, HDFC Bank, HUL and Infosys. The Indian rupee slipped marginally in early trade against the dollar. It opened at 61.44 per dollar on Wednesday as against previous day's closing of 61.31 per dollar. The dollar traded at a one-week high as investors further trimmed bearish positions ahead of the outcome of the Federal Reserve policy meeting.

Major US indices finished near session highs, with the S&P 500 touching a fresh high and the Dow within 50 points of an all-time record, as investors look ahead to the Federal Reserve's announcement. In the currency space, the dollar traded at a one-week high as investors further trimmed bearish positions. The euro slipped to USD 1.3746, pulling further away from a 23-month peak of USD 1.3833 set just a few days ago. Crude prices gave back some of the previous session's sharp gains, on expectations that recent disruptions in exports from OPEC member Libya could be short-lived. From precious metals space, gold is treading water below five-week highs as investors awaited the end of a Federal Reserve policy meeting to gauge the bank's stimulus outlook.