Nifty ends above 7550, Sensex strong; Sun Pharma, Infy drag

24 Jun 2014

03:45 pm Bullish call: Ace investor Rakesh Jhunjhunwala has lot of hope from the new government and he is confident that India is entering a phase of unprecedented growth territory. "We may not overtake China, but it will be first time that in a free world and with due adherence to laws, you will have this kind of growth," he said.

Speaking at CII conference, he said India has all the ingredients for long term growth and 25 percent of workforce across world will be Indians in next 20 years. "I am extremely bullish on India and there is no reason why we shouldn't grow," he said.

03:35 pm Market closing: It was day to recover some loses that the market has seen over last weeks. The market rallied as the Nifty ended below 7600-mark. The Nifty was up 86.85 points or 1.16 percent at 7580.20 while the Sensex closed up 337.58 points or 1.35 percent at 25368.90.

GAIL pocketed 4 percent gains while HDFC was up 3 percent, followed by BHEL, SBI and Axis Bank.

Among the losers were Sun Pharma, Infosys and Wipro.

03:25 pm Commodity talk: Nick Parsons, National Australia Bank says the most striking feature right now is the absolute lack of volatility in global markets.

Back home in India, he is bullish about the country's long-term prospects, but is cautious in the short term. He says India is by far the best performing market not just within the emerging markets universe but globally. ''We have got double digit gains year over year,'' he adds.

"If you look at Brent crude it is down USD 1.40/barrel from the highs. The absolute high we saw on an intraday basis was at the end of last week on Thursday when we got to USD 115.71/barrel on the Futures market. Futures this morning have eased back a bit, crude is at USD 113.77. So we are almost USD 1.5 of the highs," he said in anintreview to CNBC-TV18.

3:15 pm Buzzing: Shares of Bharti Infratel rose 6 percent intraday. Bank of America Merrill Lynch reiterates buy rating on the stock with an increased target of Rs 280 per share, indicating an upside of 22 percent.

The brokerage is bullish on the stock for for its steady growth and solid balance sheet. According to BoAML, Bharti Infratel offers 14-15 percent EBITDA growth, 5-6 percent free cash growth and rising free-cash yield (currently at 7 percent for FY16E).

''The stock trades at 8x FY16E EV/EBITDA, implying a 40-50 percent discount versus global peers. This discount could narrow if there is greater comfort about independence versus shareholder-tenants,'' it says in a note.

The market is seeing good buying as the Sensex is up 272.42 points or 1.09 percent at 25303.74. The Nifty is up 73.40 points or 0.98 percent at 7566.75. About 1902 shares have advanced, 1052 shares declined, and 137 shares are unchanged.

Sun Pharma, Infosys, Wipro, Bharti Airtel, and HUL are top losers in the Sensex.

The market records all time high volumes today, crossing the previous peak of Rs 5.3 lakh crore. What is unusual about today's volumes is that for the first time BSE F&O turnover is higher than the NSE's. In fact F&O turnover on the BSE today accounts for nearly 60 percent of overall turnover.

Global markets are a mixed bag today, Asia closed in the green with Korea up 1 percent while Europe is trading sideways now after the German business climate index for June fell to 110.4 versus 111.2 last month. This comes on the back of drop in euro zone PMI yesterday

However, it is a big relief on crude as Brent crude falls to USD 113.6/bbl. This as Iraq supply fears ease and southern Iraq remains unaffected by Islamic insurgents continued advance on Baghdad.

03:00pm Stocks at fresh 52-week high
Stocks like ABB, Ashok Leyland, Asian Paints, Aurobindo Pharma, Bajaj Auto, Bharat Electronics, Federal Bank, GAIL, HDFC, Indian Hotels and Petronet LNG touched fresh 52-week high today.

02:45pm Dealing Room Check
The rally is led by high beta and oil & gas stocks. The flows were mixed at institutional desk. FIIs will be net buyers in cash market today. Midcaps and smallcaps relatively outperform. However, dealers are advising caution ahead of expiry at current levels

02:30pm Midcaps/smallcaps outperform
Kaveri Seed (up 12.58 percent), Solar Industries (up 9.48 percent), Jubilant Food (up 7.71 percent), Sintex Industries (up 6.68 percent) and Rallis India (up 6.35 percent) were big gainers in the midcap space.

Among smallcaps, Mahindra Ugine (up 20.00 percent), Mahindra CIE (up 15.98 percent), GOL Offshore (up 13.57 percent), ISGEC Heavy Eng (up 10.00 percent) and HCL Info (up 10.00 percent) were minting money for traders.

02:15pm Total market turnover at record-high
The total market turnover hit record-high today boosted by abrupt F&O volumes on the BSE. The total turnover crossed previous high figure of Rs 5.33 lakh crore it touched on October 31, 2013.

02:00pm Indian market saw a stupendous rally today led by heavy buying in banks, realty, power, capital goods. oil&gas and metal stocks. The volumes were significantly higher today and set to close with record turnover figures today.

The Sensex was up 376.52 points or 1.50 percent at 25407.84, and the Nifty was up 96.85 points or 1.29 percent at 7590.20. About 1966 shares advanced, 909 shares declined, and 122 shares were unchanged.

Top gainers in the Nifty were DLF (up 4.51 percent), GAIL (up 4.45 percent), Bank of Baroda (up 3.48 percent), NMDC (up 3.37 percent) and BPCL (up 3.25 percent).

Kotak Mahindra Bank was the top loser in Nifty. ONGC (down 0.71 percent), HCL Tech (down 0.69 percent), Sun Pharma (down 0.69 percent) and Infosys (down 0.64 percent) were other big losers.

Cues to watch today/tomorrow

Aviation Minister presser at 2.30 pm today
Nitin Gadkari's presser on highway review at 4 pm today
PM meeting with secretaries of the departments of commerce, industry, heavy industry and public enterprises at 5 pm
Power min likely to meet Environment Minister today

Indian Hotels

Board meet today to raise fund upto Rs 1000 crore via rights and other instruments

HDFC Bank

Board meet tomorrow on raising capital
Seeking to raise upto Rs 10000 crore

Jayswal Neco

Board meet tomorrow to raise funds

2:00 pm Market alert: the Sensex is up 375.92 points or 1.50 percent at 25407.24, and the Nifty is up 96.85 points or 1.29 percent at 7590.20. About 2016 shares have advanced, 872 shares declined, and 111 shares are unchanged.

2:00 pm Market outlook: Investors are focussed on the long- term growth of India on back of optimism surrounding the new government and expectations of speedy reforms, Pramod Gubbi, Director (Institutional Sales), Ambit Capital said. In an interview to CNBC-TV18, he said most investors are bullish on India at this point. Though the recent steep railway fare and freight rate hike is seen by many as an anti-populist move, it has boded well with long-term investors, he said.

Also, they expect Modi government's maiden Budget, scheduled on July 10, to be pragmatic. On sectors, funds are rotating from defensives to cyclicals and valuation gap between cyclicals and defensives has narrowed, he said. He expects earnings of cyclicals to be upgraded in the near-term. Gubbi is bullish on financials, auto and mining.

1:50 pm Corporate interview: Infrastructure finance company IDFC that has bagged a banking licence is working back to make sure that everything falls into place, including the structural aspects of such a transition, and it is able to start operations from October 2015, says Vikram Limaye, MD & CEO of IDFC.

He says IDFC is looking at ways to bring down foreign shareholding without raising capital, including FPO. But an FPO will only be possible after its annual general meeting – that is July end, he adds.

In early June, IDFC had decided to come out with a follow-on public offer so as to bring down foreign shareholding in the company below 50 percent. As per the existing regulations, a bank has to be floated by a domestic entity. Currently, foreign ownership in IDFC is 53 percent, making it a foreign entity. Therefore, it needs to pare foreign investor holding.

1:40 pm Walk the talk: Finance Minister, Arun Jaitley said that it is a challenging time for the Indian economy and growth of less than 5 percent has its immediate effect on the revenue growth of the country.

Speaking on the sidelines of an event, Jaitley said that it is time to take action to fix the health of the economy, which has been growing below 5 percent for the past two years.

In wake of the economic slowdown, Finance Ministry is a challenging job, but the government is working on steps to restore investor confidence, he added.

Jaitley, who is also the Defence Minister said that slow pace of acquisition of weapons for armed forces is a matter of concern and possible steps would be taken to expedite the processes.

Modi goverment's maiden Union Budget will be presented on July 10.

1:30 pm Buzzing: Shares of GAIL and Indraprastha Gas rallied 5 percent each intraday on Tuesday as the government may soon hike natural gas prices. News report suggest that CNG, PNG and LNG are likely to become costlier just as the government increased rail fare and sugar import duty before presenting the Union Budget is tabled on July 10.

According to reports, the hike is expected to be lower than that planned by UPA. Price hike is likely to be between USD 5.5-6.8/units. UPA had suggested price hike of USD 8.4/unit.

Meanwhile, the oil ministry gets cracking on a new gas price note and clarity is expected shortly. The new government has taken stock of the controversial Rangarajan committee formula on gas prices.

A high-level meeting was held on Sunday between the Prime Minister Narendra Modi, FM Arun Jaitley, Oil Minister Dharmendra Pradhan and Petroleum Secretary Saurabh Chandra to discuss the gas pricing issue.

1:20 pm Drug test: The health ministry has formed a committee that will meet for the first time to consider raising the number of drugs deemed essential and subject to price caps, people directly involved in the process said.

The committee will consider adding more drugs to the National List of Essential Medicines (NLEM), all of which would then come under price controls, one of the people told Reuters.

New Delhi last year raised the number of drugs that are subject to price controls to 348, up from 74 earlier, with a view to make medicines affordable for the 70 percent of people living on less than USD 2 a day.

Health Minister Harsh Vardhan and Secretary for the Ministry of Health and Family Welfare Lov Verma did not respond to mails for comment. All the sources declined to be named because the details of the plan are not public.

Nifty holds on to 7,550 supported by banks, oil & gas and power stocks. IT stocks are marginally in the red.

The Nifty is up 73.15 points at 7566.50. The Sensex is up 293.43 points at 25324.75. About 1903 shares have advanced, 848 shares declined, and 113 shares are unchanged.

GAIL, Tata Power, BHEL, HDFC and ITC are top gainers in the Sensex. Among the losers are Sun Pharma, Infosys, ONGC, Wipro and Bharti Airtel.

Asian markets trade higher following upbeat US data but then again gains are capped as traders monitor developments in Iraq and Ukraine.

The rupee trades higher against the dollar as crude oil prices ease. The rupee is expected to stay in a tight range as inflows are likely to be absorbed by oil-related dollar purchases.

12:45pm What sugar comapnies have to say?
Steps taken by the government to bail out the ailing sugar industry are in the right direction, says Vivek Saraogi, managing director of Balrampur Chini Mills . He says it is a good idea to extend sugar export incentive till September 2014.

12:30pm ITC rebounds after sharp sell-off
Shares of ITC made a smart recovery on Tuesday after sharp selloff seen yesterday that was triggered by media reports suggesting increase in tax hike on cigarettes. The FMCG major rallied over 2 percent intraday after slew of brokerages maintained buy rating on the stock.

12:15pm Brent cools off, India cheers
Brent crude slipped below USD 114 a barrel on Tuesday, as data showing near-record high oil exports from Iraq indicated supplies remained unaffected by the escalating violence at the OPEC's No. 2 producer.

12:00pm The Nifty staged a smart comeback today after drifting below 7450 yesterday. The benchmark index has rallied close to 130 points since then. Analysts expect market to trade volatile in the expiry week.

The Sensex was up 275.30 points or 1.10 percent at 25306.62, and the Nifty was up 69.60 points or 0.93 percent at 7562.95. About 1758 shares advanced, 805 shares declined, and 129 shares were unchanged.

Oil&gas stocks were buzzing in trade today. Sources say the PM and FM were apprised of the Rangarajan gas price formula and all the legal issues around gas pricing. It is believed the PM and FM have decided to personally review the Rangarajan gas price formula that had been approved by the previous UPA-II government.

Banking stocks were on buyer's radar today. Reports suggest that the government is working to solve the power crisis which will benefit bank stocks that have huge outstanding over dues to some of the power companies.

Top gainers in the Nifty were GAIL (up 3.88 percent), DLF (up 3.19 percent), Bank of Baroda (up 3.17 percent), NMDC (up 3.14 percent) and BPCL (up 2.18 percent).

Kotak Mahindra Bank was the top loser with loss of 1.76 percent followed by Sun Pharma (down 0.92 percent), Infosys (down 0.88 percent), ONGC (down 0.8 percent) and UltraTechCement (down 0.71 percent).

11:50 am Interview: Steps taken by the government to bail out the ailing sugar industry are in the right direction, says Vivek Saraogi, managing director of Balrampur Chini Mills . He says it is a good idea to extend sugar export incentive till September 2014. However, depending on the crop, the government should perhaps look at extending it to next year on account of excess production.

Balrampur Chini Mills has a distillation capacity of 8.5 crore litres of total alcohol in which it makes ENA, Rectified Spirit, SDS and ethanol. Saraogi says 10 percent ethanol blending should be taken up more seriously as it is environment friendly, oil marketing companies are saving over Rs 10 in the price at which Balrampur Chini supplies it to them and OMCs are also saving on foreign exchange.

11:40 am Rebound: Shares of ITC made a smart recovery after sharp selloff seen yesterday that was triggered by media reports suggesting increase in tax hike on cigarettes.

The FMCG major rallied over 2 percent intraday after slew of brokerages maintained buy rating on the stock.

Calling the news flow 'noise' rather than representing a step change in the tobacco taxation, Citi says ITC is cheapest in staples universe. Citi argues that chances of a hike is low as sustained and sharp tax hikes create an impetus for smuggling. The brokerage says that state governments (UP & Punjab) had earlier experimented with high VAT which was rolled back to discourage inter-state smuggling that followed as a result of high prices.

11:30 am Big bull: Ace investor Rakesh Jhunjhunwala has lot of hope from the new government and he is confident that India is entering a phase of unprecedented growth territory. "We may not overtake China, but it will be first time that in a free world and with due adherence to laws, you will have this kind of growth," he said.

Jhunjhunwala, who also runs Rare Enterprise, has been an investor in Rallis India. On June 7, he bought 952,000 shares of the company worth of around Rs 12 crore through open market transaction.

11:20 am Buzzing: Shares of Power Grid were up over 1 percent intraday as it is going aggressive in its investment plans. In a board meeting, the central transmission utility has approved investing Rs 5,500 crore.

Out of the total, Rs 5,151.37 crore will be used for upgrading transmission corridor for independent power plants (IPPs) in Chhattisgarh and the rest is for generation project of NTPC.
''The board has approved investment for Transmission System Strengthening in WR-NR Transmission corridor for Independent Power Plant IPPs in Chhattisgarh' at an estimated cost of Rs 5,151.37 Crore, with commissioning schedule of 45 months progressively from the date of investment approval while Transmission System associated with Lara STPS-I (2x800MW) generation project of NTPC is at an estimated cost of Rs 400.47 Crore, with commissioning schedule of 34 months progressively from the date of investment approval,'' it said in a statement to BSE.

The market is making smart moves with the Nifty fast approaching 7600. The Nifty is up 75.65 points or 1.01 percent at 7569 while the Sensex is up 296.24 points or 1.18 percent at 25327.56.About 1689 shares have advanced, 678 shares declined, and 90 shares are unchanged.

GAIL, L&T, HDFC, ITC and SBI are top gainers while Infosys, Sun Pharma, Wipro and ONGC drag in the Sensex.

Asian shares clinched slender gains on Tuesday as improved manufacturing data from China, Japan and the United States augured well for global growth, despite a disappointing result from the euro zone.

Brent crude slipped below USD 114 a barrel, as data showing near-record high oil exports from Iraq indicated supplies remained unaffected by the escalating violence at the OPEC's No. 2 producer. Exports from Iraq's southern terminals averaged 2.53 million barrels per day (bpd) up to June 21, according to shipping data and Reuters sources, even as Sunni Islamist insurgents have captured swathes of territory in northwest and central Iraq. This compared with May's average of 2.58 million bpd - the highest since 2003.

10:50 am Farmer sops: The Centre would announce a new agriculture insurance scheme in about six months after taking inputs from state governments and farmers organisations, Union Agriculture Minister Radha Mohan Singh said. "Farmers are not getting proper benefit from the present 'Krishi Bima Yojana' (agriculture insurance scheme). We have sent letters to all Chief Ministers, seeking their advice so that farmers get maximum benefit from the scheme.

"We will hold a meeting of Agriculture Ministers. We will take inputs from Chief Ministers, State Agriculture Ministers and farmer outfits and announce a new 'Krishi Bima Yojana' in about six months for the benefit of farmers," he said, addressing a meeting at the BJP office. Talking to reporters later, Singh said recommendations made by a commission on the Minimum Support Price (MSP) for various farm produce are being currently considered by the Finance Ministry.

10:40 am Hosueview: ITC bounces back after losing over 6 percent yesterday. Citi says if sharp tax hikes are enforced, volumes could decline by 25-33 percent. It think the news flow is noise and the stock is the cheapest stock in staples universe. Nomura says if the excise duty increase is 50 percent, volume decline will be high single digits, however its highly unlikely this scenario plays out.

10:30 am Market outlook: Concerns over the ongoing conflict in Iraq could dampen sentiment for India in the near term, but only if the situation worsens, feels Gautam Trivedi of Religare.

"There is no dearth of appetite for India or Indian paper; the Iraq air pocket has slightly slowed down things," Trivedi said in an interview to CNBC-TV18.

"If the situation in Iraq does not worsen, the event will get baked into the valuations," he said.

Trivedi is bullish on cement and infrastructure, Religare's top sectoral picks.

He is hopeful that the upcoming Union Budget announcing measures to boost infrastructure spending. Trivedi rates Larsen and Toubro (L&T) as his top pick in the infrastructure space. In the IT space, Infosys and Tata Consultancy Services (TCS) are Trivedi's top bets. He is also bullish on state-owned banking shares.

10:20 am Rail fare hike: Pressure is mounting on the Narendra Modi government to scrap the rail fare hike for Mumbai suburban trains. Shiv Sena and Maharashtra BJP MPs met Railway Minister Sadananda Gowda to discuss their concerns over the rail fare hike.

Government sources say Shiv Sena supremo Uddhav Thackeray spoke to Finance Minister Arun Jaitley demanding that the implementation of the fare hike be deferred. Sources further say that the government has ruled out a rollback.

However, sources say that to ease the pain, the hike could be staggered for suburban trains. But even this many not be spread out over several stages.

Sources say that Prime Minister Narendra Modi will take a final call on the matter, if needed.

The market is on strong footing today as investment sentiment perks up with Big bull Rakesh Jhunjhunwala of Rare Enterprise being super positive on India and the new government spearheaded by Modi. The Sensex is up 272.38 points at 25303.70 and the Nifty is up 69.95 points at 7563.30.

Speaking at a CII conference, Jhunjhunwala said that there is lot of hope from the new government. He feels India is entering a phase of unprecedented growth territory and is already into a new growth trajectory.

''25 percent of workforce across world will be Indians in next 20 yrs. India has all the ingredients needed for healthy growth,'' he elaborated.

Meanwhile, GAIL, HDFC, Sesa Sterlite, Hindalco and NTPC are top gainers in the Sensex. Among the losers are Infosys, Sun Pharma, Wipro and ONGC.

Asian shares were subdued while major currencies kept to recent snug ranges after a surprisingly soft reading on euro zone manufacturing took the shine off better data from China, Japan and the United States. Moves were marginal as markets slipped into something of a summer lull and MSCI's broadest index of Asia-Pacific shares outside Japan was just a fraction firmer.

Gold was little changed as investors watched developments in violence-wracked Iraq, while platinum steadied after two days of losses as strikes in top producer South Africa came to an end.

South Africa's AMCU union declared a five-month platinum strike "officially over" on Monday, bringing to an end the longest work stoppage in the country's history. Miners are expected to return to work this week.

10:00 am Buzzing: Shares of Power Grid gained over 1 percent intraday as it approved investments of Rs 5,500 crore for upgrading networks in about 4 years.

"Board of Directors of the Company approved strengthening the transmission corridor for independent power producers in Chhattisgarh at an estimated cost of Rs 5,151.37 crore," Power Grid Corporation informed the stock exchanges.

The commissioning schedule of the transmission project is 45 months from the date of investment approva ..

9:50 am Positive on India: Big bull Rakesh Jhunjhunwala of Rare Enterprise is super positive on India and the new government spearheaded by Modi. Speaking at a CII conference, Jhunjhunwala said that there is lot of hope from the new government. He feels India is entering a phase of unprecedented growth territory and is already into a new growth trajectory.

''25 percent of workforce across world will be Indians in next 20 yrs. India has all the ingredients needed for healthy growth,'' he elaborated.

9:40 am Gas price: Oil ministry gets cracking on a new gas price note and clarity is expected shortly. The new government takes stock of the controversial Rangarajan committee formula on gas prices.

Sources say the PM and FM were apprised of the Rangarajan gas price formula and all the legal issues around gas pricing. It is believed the PM and FM have decided to personally review the Rangarajan gas price formula that had been approved by the previous UPA-II government.

9:30 am Market outlook: Abhay Laijawala of Deutsche Bank said that, "Recent bold measures by the government on food inflation and railway tariff hikes illustrate the Modi administration's resolve to address India's macroeconomic imbalances and make economic recovery the cornerstone of its political strategy. While the pace of this transition has been slow, we are convinced that a bottom has been made. The financials sector should be the biggest beneficiary of this shift. Prospective stock beneficiaries include Kotak Mahindra Bank, Axis Bank, HDFC Bank, Bank of Baroda, Punjab National Bank, LIC Housing Finance and Shriram Transport."

Sakthi Siva of Credit Suisse said that, "We have been highlighting that in three of the last four years we have had second half rallies in MSCI Asia Ex-Japan with a bottoming in global macro indicators acting as a catalyst for the rally. Our MSCI Asia Ex-Japan year-end target of 625 offers nearly 10 percent upside from current levels of 570. The key risk to this call is the higher price-to-book of MSCI World at 2.1x this year compared to prior years."

The market has opened on a positive note with support from oil & gas stocks. The Sensex is up 141.06 points at 25172.38 and the Nifty is up 21.85 points at 7515.20.

About 476 shares have advanced, 110 shares declined, and 15 shares are unchanged. GAIL, ITC, HDFC, M&M and BHEL are top gainers in the Sensex. Among the losers are Infosys, HUL, Wipro and TCS.

The Indian rupee opened higher by 8 paise at 60.12 per dollar versus 60.20 Monday. Euro continues to remain under pressure, trading below the 1.36 mark.

Ashutosh Raina of HDFC Bank said that, "The flight of capital to safe heavens continues with gold prices hitting recent highs. All equity and currency markets worldwide have been stuck in a very narrow range.Expect the trend to continue till some solution to Iraq crisis is in sight. The 59.50-60.50/dollar range in USD/INR pair to continue.''

Global markets are mixed with the US markets ending marginally in the red despite strong economic data. European markets declined as manufacturing and services PMI numbers disappointed. Asian markets, meanwhile, is mixed in morning trade.

In other asset classes, Brent Crude slipped below USD 114 per barrel as data showed Iraq oil exports in June were near record highs and not impacted by the conflict. Disappointing European data also contributed to the decline.

Precious metal gold is hovering near two-month highs as geopolitical tensions supported the metal's safe-haven appeal. And euro continues to remain under pressure, trading below the 1.36 mark.