Nifty closes above 8100 for 1st time; TCS, Infosys lead
03 September 2014
03:30pm Market Check
The market saw another record closing high on Wednesday with the Sensex rising 120.55 points to 27139.94 and the Nifty advancing 31.55 points to 8114.60.
Coal India, Infosys, Bharti Airtel, Wipro and TCS were prominent gainers in trade today, up 2-4 percent while GAIL, ONGC, ITC, Bajaj Auto, BHEL and Cipla were losers, down 1-2 percent.
03:15pm L&T on buyers' radar
Competition Commission has cleared the proposed acquisition of Larsen & Toubro Infrastructure Development Projects' securities by foreign venture capital investor CPP Investment Board Singaporean Holdings 1.
According to the fair trade regulator, the proposed deal "is not likely to have an appreciable adverse effect on competition in India".
Under the deal, CPP Investment Board, part of Canada Pension Plan Investment Board, would subscribe to compulsorily convertible preference shares and nominal equity shares of Larsen & Toubro Infrastructure Development Projects Ltd (L&T IDPL).
The subscription would entitle CPP Investment Board to acquire a stake not exceeding 49 percent in L&T IDPL, post conversion of the securities, reports PTI.
02:55pm Himatsingka to double revenues in two years
The Himatsingka group operates over 10 brands globally in the home textile space. Its brand portfolio includes marquee brands like Calvin Klein Home, Barbara Barry, Esprit, Bellora and Atmosphere, among others. During FY14, the group generated revenues of over Rs 600 crore from brands.
Looking forward, the group is exploring various initiatives to augment its brand portfolio and deepen the distribution network of these brands. These initiatives should potentially steer revenues from brands to approximately Rs 1200 crore over the next two years.
02:45pm Coal shortage
The number of thermal power plants with less than seven days of coal stocks has risen to 56 this week from 52 last week, government data showed on Wednesday.
India's 100 thermal power plants had enough coal overall to last six days on September 1, unchanged on week, the Central Electricity Authority said.
The stock levels are the lowest since mid-2012, when hundreds of millions of people were cut off in one of the world's worst blackouts, reports Reuters.
02:30pm Equity benchmarks erased more than half of gains in last 15 minutes of trade due to fall in banks, FMCG and metals stocks. The Sensex had rallied more than 200 points after reports indicated that Ukraine's president Petro Poroshenko has reached an agreement with Russian president Vladimir Putin on a permanent cease fire in Eastern Ukraine but immediately erased same of these gains as reports quoting Russian official said Putin didn't agree to ceasefire with Ukraine.
European markets like FTSE, CAC and DAX trimmed gains from 1-2 percent to 0.8-1.3 percent but Russia and Ukraine markets maintained gains over 4 percent..
The Sensex rose 84.61 points to 27104 and the Nifty climbed 24.60 points to 8107.65 supported by technology stocks while the BSE Midcap and Smallcap gained 0.7-1 percent.
In commodities, Brent crude prices dropped to 16-month lows of USD 100 a barrel on account of the strength in the dollar and demand concerns emanating out of China.
Manish Gunwani of ICICI Prudential said the energy sector will benefit hugely from the fall in crude prices and that oil marketing companies are still trading at cheap valuations.
The rupee snapped its four-day losing streak, rising to 60.36 a dollar as against a close of 60.68 yesterday amidst sustained overseas capital inflows.
02:00pm Just Dial in focus
JustDial, one of the leading search engine provider has planned a service launch in international markets with minimal investment for initial 2-3 years.
The company's cost to download apps on mobile internet has escalated 3-4 times in the last year itself. Ramkumar Krishnamachari, CFO, JustDial is confident of app downloads to see a sharp rise via aggressive marketing spends.
In an interview with CNBC-TV18, he says Justdial's Search Plus engine will be margin-accretive once it scales up. Their Search Plus engine is asset-light in capex as well as operating expenses.
''As and when these products scale up in terms of usage, these are definitely going to be high margin products for us. Our idea is to make sure that first to get the usage up, because these involve changes both at the user end as well as the vendor's end'', he adds.
Moreover, the company's premium listings that account for 45 percent of the revenue, stood at 16000, highest in 8 quarters.
01:40pm Nikkei Check
Japanese shares hit a seven-month high, with financial shares leading the gains, in the hope a cabinet reshuffle by Prime Minister Shinzo Abe giving fresh impetus to his "Abenomics" growth-promoting policies.
Exporters' shares also rode high as the yen weakened to an eight-month low and solid US manufacturing data boosted their business prospects, even though US shares ended mixed the previous day.
The Nikkei share average rose 0.4 percent to 15,728.35, the third consecutive day of gains, which took the market to levels not seen since late January, reports Reuters.
01:25pm Market Expert
Vikas Khemani, CEO, Wholesale Capital Markets of Edelweiss Financial Services feels the market is well poised for long-term investments as FII and domestic flows continue to be strong. He further expects domestic market to grow significantly for the next 12-18 months.
He says that midcaps will outperform large caps for the next 3-4 years. Remain bullish on midcap pharma space, he advises investors.
01:00pm The market maintained positive momentum in afternoon trade with the Sensex rising 117.93 points to 27137.32 and the Nifty advancing 30.60 points to 8113.65. About 1414 shares have advanced, 1334 shares declined, and 136 shares are unchanged.
Ridham Desai of Morgan Stanley believes the market is in a midst of a multi-year bull run. He sees a 40 percent probability of Sensex hitting 33,900 by June 2015.
Shares of TCS, Infosys, Wipro and Bharti Airtel gained 3 percent while ITC, ONGC, GAIL, Hero Motocorp, Bajaj Auto and BHEL slipped 1-2 percent.
Tata Motors gained 1.5 percent as it won an order for 2700 buses under JNNURM scheme. The stock got a boost from brokerages as well. It remains Jefferies' top pick in the sector. The brokerage upgraded the stock to a buy with a higher target of Rs 627 per share.
Oil marketing companies like HPCL, BPCL and IOC gained 1-2 percent as Brent crude prices hit a 16-month low.
Meanwhile the dollar index continued to hover near 14-month highs against a basket of major currencies, underpinned by upbeat US data and further supported by a sell-off in the yen.
12:59pm Era Infra on buyers' radar
Era Infra Engineering has received a contract for construction of new integrated terminal building at VSI Airport, Port Blair valuing Rs 314.61 crore (approximately) by Airport Authority of India (AAI). The stock gained nearly 4 percent.
12:45pm Century Plyboards in News
Shares of Century Plyboards climbed over a percent post complete divestment of shareholding in subsidiary last month.
The plywood and veneer wood manufacturer said it has disinvested its entire shareholding in its subsidiary Aegis Business on August 23, 2014.
Consequently, ABL and its subsidiary Aegis Overseas ceased to be subsidiaries of the company with effect from same date, it added.
Satish Parakh, Managing Director of Ashoka Buildcon said the company expects the order book to swell from the current Rs 4000 crore to Rs 5000 crore by FY16.
The expected revenue in FY15 would be around Rs 730 crore on back of engineering, procurement and construction (EPC) growth of around 20 percent and with 13 operational projects contributing to their toll revenues, said Parakh.
Ashoka Buildcon is in the business of building and operating roads and bridges in Indian on a build, operate and transfer (BOT) basis.
According to Parakh NHAI is expected to auction around Rs 50,000 crore worth of projects.
12:00pm The market continued its upward momentum in noon trade with the Sensex rising 84.61 points to 27104 and the Nifty climbing 22.85 points to 8105.90 supported by technology, telecom and Tata group stocks. However, banks, FMCG and two-wheeler shares declined.
Mahesh Nandurkar of CLSA expects the new government to change India's growth trajectory over the next five years in several small steps instead of a few big-bang reforms. The effects of its initiatives to revive investment sentiment as well as contain the fiscal deficit and inflation should become visible from 2HFY15, he adds.
Top telecom operator Bharti Airtel kept its top position in the buying list, up 3.5 percent followed by TCS, Infosys and Wipro with more than 2 percent. Commercial vehicle maker Tata Motors climbed over a percent on getting order for 2700 buses under JNNURM scheme. Jefferies upgraded the stock to buy with a higher target price of Rs 627.
However, state-run GAIL fell more than 2 percent followed by ITC, ICICI Bank, ONGC and Hero Motocorp with over a percent.
Among midcaps, Carborundum Universal, Alembic Pharma, Phoenix Mills, Bhushan Steel and Monsanto India rallied 5-10 percent whereas Schneider Electric, SKF India, 3M India, RCF and BF Utilities lost 2-4 percent.
11:30 am Market opinion: Manish Gunwani, Senior Fund Manager of ICICI Prudential AMC believes the economy is in a sweet spot, which will benefit the equity market. However, he maintains a 'cautiously bullish' stance as most sectors trade near their long-term average valuations. He says investors should moderate return expectations. Gunwani is positive on autos and auto ancillaries after the recent signs of pick up in growth. He also sees signs of revival in consumer discretionary and banking.
''We have a constructive view on the pharma sector and long turn duration bonds,'' he told CNBC-TV18 in an interview. He says a cyclical recovery will depend on how deep economy recovery turns out, but early indicators are positive. The investment environment has picked up thanks to a pro-active government. All this has reinstated the India in a long-term bull market theory. ''We expect equities to give healthy gains in the next 2-3 years horizon,'' he said.
Strong momentum in market continues as the Sensex is up 147.05 points at 27166.44, and the Nifty is at 8123.70 up 40.65 points. About 1449 shares have advanced, 960 shares declined, and 90 shares are unchanged.
Bharti is still up 4 percent. TCS, Infosys, Wipro and Tata Motors are top gainers in the Sensex. Among the losers are GAIL, ITC, Hero MotoCorp, ICICI Bank and Bajaj Auto.
Brent crude prices are at a 16-month low at levels near USD 100 per barrel on the back of strength in dollar index, on slowing demand from Europe and china. OMCs gain in trade as the decline in crude further eases under recoveries.
India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating, even as the economy is headed for recovery, Moody's Investors Service said. Although Moody's expects the government to meet the fiscal deficit target of 4.1 percent for the fiscal year ending in March, it noted the country's finances would "remain vulnerable to future cyclical downturns and external shocks."
Meanwhile, Moody's also said India's ratings were constrained by inflation, reiterating comments also made last week.
10:59am Hindalco in News
Metals producer Hindalco has been exploring various options to raise USD 1 billion-plus or around Rs 5,000 to 6,000 crore funds. The company has been exploring options of rights issue, bonds and non-convertible debentures (NCD).
Hindalco has announced to the stock exchanges that shareholders will be considering Rs 6,000 crore NCD issue in the annual general meeting (AGM). This essentially means that they have also put in a proposal to raise the borrowing limit to around Rs 20,000 crore.
In order to fund their expansion plans, the net debt at around Rs 58,000 crore and gross debt at Rs 63,000 will surely be daunting for the company. Thus, it is looking to raise the borrowing limit and take in money through the NCD route.
10:45am Reliance Capital in focus
With an aim to deepen its partnership, Japanese giant Nippon Life is in talks to increase its stake in India's leading private insurer Reliance Life, as soon as the government allows higher FDI in the sector. Nippon Life currently holds 26 percent stake in Reliance Life Insurance Company, which it had bought for Rs 3,062 crore. This deal was completed in October 2011 and it had valued the Indian insurer at over Rs 11,500 crore at that time.
The Indian government has now proposed to hike FDI cap in insurance sector from 26 percent to 49 percent. The proposal was cleared by the Union Cabinet in July this year and the government has said it is hopeful of its passage in the Parliament, reports PTI.
10:25am FII View
Neelkanth Mishra, Credit Suisse says Q1FY15 BoP surplus is the highest since March 2008 as capital flows surprise. BoP surplus with slow loan growth could drive record high funds surplus, pushing down wholesale rates, it adds.
"In the past, they have dipped below repo rates for sustained periods and we could see a repeat. This would be helpful for some NBFCs like Shriram Transport, LIC Hsg Fin and IndusInd Bank," says Mishra.
10:00am Equity benchmarks remained in a positive terrain supported by telecom, technology, metals and Tata group stocks. The Sensex rose 72.70 points to 27092.09 and the Nifty climbed 21.65 points to 8104.70.
The BSE Midcap and Smallcap indices gained 0.5 percent and 0.4 percent, respectively. About 1231 shares have advanced, 798 shares declined, and 91 shares are unchanged.
Technology majors Infosys, TCS and Wipro gained 1-2 percent while top telecom operator Bharti Airtel topped the buying list, up over 3 percent. Among metals, Tata Steel, Sesa Sterlite and Hindalco rose 1-2 percent.
Commercial vehicle maker Tata Motors rallied 1.5 percent after Jefferies upgraded the stock to a buy with a target price of Rs 627 on the back of great product momentum in JLR, recovering domestic truck market and most importantly, on lesser concerns on sustainability of profitability in China.
However, ICICI Bank, ONGC, ITC, HDFC Bank, GAIL, Sun Pharma, M&M, SBI, Hero Motocorp and Dr Reddy's Labs fell 0.3-2 percent.
9:45 am Market outlook: Morgan Stanley has upgraded its June 2015 target for the Sensex to 28800 after the recent rally, says managing director, Ridham Desai. However, that's his conservative estimate.
Desai expects the Sensex to rally as high as 33900, but with some conditions: if the government continues to work on it fiscal consolidation path and the Fed doesn't take any disruptive policy action. If these two conditions are met, then Desai says, the Sensex has about 40 percent chance of seeing this level by June 2015.
A 360-degree turnaround in sentiment regarding India, apart from institutional flows has led to this market rally. And a lot of it has to be credited to the government, believes Desai.
''People abroad have faith in the potency and execution of the new govt. They are sending the right signals. The Goldilock-like scenario that is unfolding, both on the macros as well as the micros, will change for sure, but we are fairly comfortable for the next three years atleast,'' says Desai.
9:35 am Maruti's Ciaz: Seeking to make a mark in the big car segment, the country's largest car maker Maruti Suzuki India will open bookings of its upcoming mid-sized sedan Ciaz from today.
Ciaz will be available in petrol and Diesel fuel options powered by a 1.4 litre and 1.3 litre engines respectively.
"The global launch of Ciaz is planned during the forthcoming festival season," the company said in a statement.
Ciaz' main competitors will be Honda City, priced between Rs 7.19 lakh and Rs 11.05 lakh, and Hyundai Verna tagged between Rs 7.39 lakh and Rs 11.72 lakh (ex showroom Delhi).
The market continues its uptrend for another day. The Sensex is up 85.35 points at 27104.74, and the Nifty is up 27.80 points at 8110.85. About 533 shares have advanced, 94 shares declined, and 22 shares are unchanged.
Tata Motors, NTPC, Tata Power, HDFC and GAIL are top gainers in the Sensex. Among the losers are Hindalco, Coal India, Bharti Airtel and Dr Reddy's Labs.
The Indian rupee gained marginally in the early trade. It has opened at 60.63 per dollar versus previous day's closing value of 60.68 a dollar.The dollar hovered at 14-month highs against a basket of major currencies early on Wednesday, underpinned by upbeat US data and further supported by a sell-off in the yen and sterling.
Pramit Brahmbhatt of Veracity said, "Investors are likely to trade cautiously as the market is already at high levels. The positive sentiment may help the market to move higher. Rupee is expected to be rangebound to slightly weak taking cues from the strong dollar. We see a range of 60.30-60.80/dollar."
In the US, markets closed mixed with the S&P 500 holding above 2,000 after rising to another intraday record, as energy companies dropped along with the price of oil and investors fretted whether the European Central Bank would make further monetary policy moves this week.
European shares slipped to close marginally lower, as investors monitored events in eastern Ukraine and reacted to economic data from the region.
In other asset classes, Brent crude slipped to a 16-month low, falling 2.5 percent to just above USD 100 per barrel while US crude hit a 7-month low. With the dollar index at a 14-month high, a strong dollar and the prospect of slowing oil demand were seen as the key reasons for the fall. Gold too was at its lowest level since mid-July, breaking through key support as the dollar hit a one-year high against the euro.