Sensex gains 480 points, Nifty ends up 1.7%; Infosys, HUL drag
18 September 2014
03:30 Market closing
The market ended the day with a roar. The Sensex ended 480.92 points or 1.81 percent higher at 27112.21 and the Nifty was up 139.25 points or 1.75 percent at 8114.75. About 2233 shares have advanced, 827 shares declined, and 93 shares were unchanged.
Hero MotoCorp was up 6 percent while L&T, HDFC, Dr Reddy's and BHEL gained 4 percent each.
Among the losers were Infosys, HUL and Sesa Sterlite.
02:55pm Maruti in News
Maruti Suzuki India today said voting by minority shareholders over its move to let parent Suzuki Motor Corp own and invest in Gujarat plant will likely happen in November instead of October as earlier envisaged.
"It is a long procedure and we have not been able to put all the things in place. So we won't be able to do it in October. It is highly probable that the voting will be in November," Maruti Suzuki India Chairman R C Bhargava said on the sidelines of a conference on Public Affairs here, reports PTI.
02:40pm Infosys signs deal
Infosys Ltd said it signed a global partnership with China's largest telecom equipment maker Huawei Technologies Company to offer enterprise customers cloud, big data and communication solutions.
The companies did not say how much the deal was worth. Huawei and Infosys will also provide other enterprise-oriented services to combine Huawei's cloud infrastructure and global IT service expertise from Infosys, the companies said in a statement.
Infosys, led by Chief Executive Vishal Sikka, has been planning to boost investment in cloud computing, smartphone apps and other new technologies to win more high-margin outsourcing contracts.
Huawei and Infosys will explore setting up a joint lab in China to enable better delivery in all areas of the partnership, the companies said, reports Reuters.
In an interview to CNBC-TV18, Mithun Chittilappilly, Managing Director, V-Guard Industries, said the company's second quarter performance so far has been quite satisfactory, thus it is sticking with its guidance of top line growth of 20 percent year on year.
The company expects EBITDA margins to be between 8.5 percent and 9 percent on the back of operating leverage. It expects margins for the fan business to improve by 6 percent.
V-Guard has a 20 percent market share in stabiliser segment and 8 percent in wire segment, the company said.
02:20pm L&T in demand
Larsen and Toubro gained 3 percent after Oman subsidiary bagged order for building Adam airbase.
The buildings and factories business of L&T Oman LLC, a subsidiary of L&T, has won a order from the Ministry of Defense, Sultanate of Oman against stiff international competition for the construction of Adam airbase in Al Dakhiliya Governorate, said the company in its filing.
This is the fifth order received by L&T group in September. Excluding today's order, the group has bagged nearly Rs 11,000 crore worth of contract in the current month.
02:10pm FII View
The Federal Reserve has said that it was nearing the end of its asset purchases and reiterated it would not hike interest rates for a 'considerable' period. CNBC-TV18 spoke to Hans Goetti, head of Asia Investment at Banque Internationale À Luxembourg, to know how this move will impact the global markets going ahead.
According to Goetti, emerging markets are going to benefit from Fed not willing to raise interest rates anytime soon. He maintains that the Indian market will be re-rated or revalued on the upside because of the changed political landscape and remains very bullish on India for the next two-three years.
"India has the potential to become the fastest growing economy in Asia by that time period," he adds.
02:00pm Equity benchmarks remained strong in afternoon trade as India signed several agreements with China for co-operation in various sectors and strengthening strong relations between countries.
The Sensex climbed 427.24 points or 1.60 percent to 27058.53 and the Nifty rose 123.20 points or 1.54 percent to 8098.70. The broader markets too traded strong with the BSE Midcap and Smallcap indices gaining 1.6 percent and 2.5 percent, respectively.
About 2132 shares have advanced, 820 shares declined, and 79 shares are unchanged.
All sectoral indices remained strong with the BSE Realty, Capital Goods, Auto, Bank, Power, Oil & Gas, Healthcare and Metal rising 1-4 percent.
Hero Motocorp, Bajaj Auto, Dr Reddy's Labs, HDFC, Larsen and Toubro, BPCL and DLF topped the buying list, up 3-5 percent.
Railway stocks like Texmaco Rail, Kalindee Rail, Titagarh Wagons, Stone India and Kernex Microsystems gained 3-7 percent after Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have signed memorandum of understanding (MoU) on extending co-operation in rail, including agreement for new Mansarovar route.
1:55 pm Exclusive: The Prime Minister's Office has sought contingency plan status on coal allocation case, to which the Coal Secretary said it needed a month's time to detail the contingency plan by formulating a basic framework to meet the coal requirements.
However, a basic framework for contingency plan is possible solely after Supreme Court's order, learns CNBC-TV18 from sources.
Coal India, power ministry and Attorney General of India have been consulted on the backup plan, said Coal Secretary to in a reply to PM's Principal Secretary Nripendra Misra.
Coal ministry will get clarity on number of coal blocks that may be de-allocated as well as the coal requirements of the end use plants like power, steel, cement and others post Supreme Court's final verdict.
1:35 pm Market outlook: R Sreesankar, Head of Institutional Equities at Prabhudas Lilladher feels that one shouldn't be surprised by the market's upmove today given its euphoric mood last week.
According to him, the only fact that could have unnerved the bulls and speculative positions for some time could have been that the bypoll election results were not as per market's expectations, as they were not in favour of BJP. Secondly, the uncertainty of Fed move . But now the elections news seems to have been digested and the Fed uncertainity out of the way, so the optimistic view for the market would continue.
He is extremely bullish on Indian IT stocks on robust demand environment, especially from US and if that is expected to continue then there will be more orders coming in for Indian companies.
1:20 pm Buzzing: Shares of rail stocks surged 5-7 percent intraday Thursday riding on hopes of an upgrade as promised by Narendra Modi in his prime ministerial campaigns. The ailing sector is all set to see an improvement after it joins hands with China which will help the nation build high-speed rail network and modernise railway stations. Cooperation with China in rail sector is expected to figure in talks between Modi and Chinese President Xi Jinping amid the new govermnent's thrust on building a network of high speed trains.
The market is roaring with hefty gains as the Nifty hits 8100, up 124.65 points or 1.5 percent. The Sensex is up 419.49 points or 1.6 percent at 27050.78. About 2082 shares have advanced, 786 shares declined, and 87 shares are unchanged.
Hero, HDFC, BHEL, L&T and Wipro are up around 3 percent each. Among the losers are HUL and Infosys. Midcaps and small caps are on fire gaining over 3 percent each.
China's President Xi Jinping gets a rousing welcome at the Rashtrapati Bhawan in New Delhi. The Chinese President is in India with a promise of investing a whopping USD 100 billion.
India's monthly gold imports are set to rise by as much 50 percent from current levels while premiums could almost double as the country gears up for a surge in demand ahead of the year-end festivities and wedding season, industry sources said.
More purchases by the world's No.2 gold consumer after China could help support global bullion prices, which are mired near an 8-1/2-month low of USD 1,216.01 per ounce amid fears a faster hike in US interest rates would dent its appeal as a hedge against inflation.
12:55pm BHEL in Focus
Bharat Heavy Electricals (BHEL) has achieved a major breakthrough by bagging a prestigious contract for setting up a supercritical thermal power project on EPC (engineering, procurement and construction) basis from Gujarat State Electricity Corporation (GSECL).
Valued at around Rs 3,536 crore, the order for setting up a 1x800 MW coal-fired supercritical thermal unit at Wanakbori in Kheda District of Gujarat, has been won by BHEL against international competitive bidding (ICB).
Significantly, this is the first ever project of 800 MW unit rating ordered in the country on EPC basis and is also the highest valued order placed by GSECL, said BHEL.
12:45pm Market Check
The market jumped further with the Sensex rising 398.78 points or 1.50 percent to 27030.07 and the Nifty adding 116.55 points or 1.46 percent to 8092.05.
About 2063 shares have advanced, 736 shares declined, and 86 shares are unchanged.
IT solutions company Mastek has been in focus with the stock moving up over 35 percent this week. The company is set to demerge its insurance business into a new company - Majesco - that would focus on software products.
In an interview to CNBC-TV18, Farid Kazani, Group CFO & Director Finance, Mastek, said the company demerged its insurance business due to different capital requirements.
''We do feel the valuations of insurance products business in the US are significantly different and the restructuring has been done in such a manner that the entire value chain of the insurance business comes under the US subsidiary, MajescoMastek US,'' he said.
Kazani said the company will need to make necessary products investment in insurance business and there are plans to grow the business both organically and inorganically. Mastek has been looking at small-ticket acquisitions in the insurance products business in the US. The company has Rs 130 crore of cash on the books, which can be used for the purpose.
Kazani said the company may raise marginal debt in insurance business in the US at lower rates. Any fundraising in US won't affect the India business, he said, adding that nothing has been finalised yet on the acquisition front.
12:20pm IFCI in News
Malay Mukherjee, CEO & MD, Industrial Finance Corporation of India (IFCI) said the company has received three bids for its 2.5 percent stake in National Stock Exchange (NSE) and the stake sale is in the process of evolution. He expects the process to be over by September 30.
He further added that government might hike its stake in IFCI via the preferential share route. The government holds 55 percent of IFCI equity and wants to support the company in a big way, he said.
Speaking about the company's financials, he said IFCI has not seen much slippage in this quarter and recoveries are on target. However, credit growth seen in FY15 won't be as good as anticipated earlier, he said.
12:10pm Market Expert
R Sreesankar, Head of Institutional Equities at Prabhudas Lilladher feels that one shouldn't be surprised by the market's upmove today given its euphoric mood last week.
According to him, the only fact that could have unnerved the bulls and speculative positions for some time could have been that the bypoll election results were not as per market's expectations, as they were not in favour of BJP. Secondly, the uncertainty of Fed move. But now the elections news seems to have been digested and the Fed uncertainity out of the way, so the optimistic view for the market would continue.
12:00pm Equity benchmarks extended the rally in noon trade with the Sensex reclaiming 27000 level supported by banks, oil & gas and capital goods stocks. In fact the market recouped all its losses seen in first two days of the week.
The Sensex jumped 362.56 points or 1.36 percent to 26993.85 and the Nifty spiked 104.55 points or 1.31 percent to 8080.05. More than three shares advanced for every share declining on the BSE.
The broader markets continued to outperform benchmarks with the BSE Midcap and Smallcap indices rising 1.7 percent and 2.5 percent, respectively.
Housing finance company HDFC topped the buying list, up 2.6 percent followed by L&T, Tata Motors, Sun Pharma, Wipro, Dr Reddy's Labs, Hero Motocorp, Tata Steel and Hindalco Industries with 2 percent gains each. However, HUL, Infosys and M&M remained under pressure.
11:55 am Interview: GMR Infra will be raising Rs 1500 crore via a rights issue and private equity firm KKR will be lending about Rs 1000 crore at the holding company level to facilitate it. However, KKR will have no holding in either GMR Infra or GMR Holding, says Madhu Terdal, group chief financial officer, GMR Infra.
Speaking to CNBC-TV18, Terdal says the loan is just a long-term structural arrangement being done by the company and KKR will not hold any board seat in GMR Holdings. The reason for the rights issue is to lower the company's high corporate debt by Rs 1250 crore. GMR has a debt of Rs 37000 crore that it looks to cut by Rs 1300 crore post the rights issue in November.
11:30 am Buzzing: Investors continued to buy shares of Crompton Greaves after Citi advises buying the stock (with a target price of Rs 234) on the basis of potential asset sale though the business recovery is yet to happen. The stock rallied as much as 1.8 percent in addition to 4 percent upside in previous session.
The company board, on July 17, proposed to demerge its consumer products business unit into a separate listed company.
The board believes that such a demerger will create better growth opportunities for its two large but significantly different businesses - power, industrial and automation which is a B2B business, and the consumer products business which is B2C. It also believes that this will create a more flexible capital structure for the two businesses to grow independently, allow them to pursue more ambitious strategic goals and, thus, create further value for existing shareholders.
The market is firing away with hefty gains on hopes of favourable agreements with visiting Chinese President Xi Jinping. The Sensex is up 316.54 points or 1.1 percent at 26947.83 and the Nifty is up 95.80 points or 1.20 percent at 8071.30. About 1901 shares have advanced, 632 shares declined, and 82 shares are unchanged.
L&T, Hero, Hindalco, Sun Pharma and SBI are top gainers in the Sensex. Among the losers are Infosys, HUL and M&M.
Shares of railways stocks surged 5-7 percent intraday Thursday riding on hopes of an upgrade as promised by Narendra Modi in his prime ministerial campaigns. The ailing sector is all set see an improvement after it joins hands with China which will help the nation build high-speed rail network and modernise railway stations.
11:00am NCC goes ex-rights
Shares of NCC gained more than 7 percent after the stock adjusted for rights issue. The infrastructure company raised Rs 598.70 crore through this rights issue.
It issued 29.93 lakh equity shares at Rs 20 apiece (including premium of Rs 18 per share) and alloted in the ratio of seven shares on rights basis for every six shares held.
INOX Leisure board is meeting on September 25 to consider and approve the proposed merger with Satyam Cineplexes, a wholly-owned subsidiary of the company.
In an interview to CNBC-TV18, Deepak Asher, President and Director of INOX Leisure, said the merger was on the cards. ''We acquired Satyam a month ago and since it's a 100 percent subsidiary of INOX Leisure, we thought it would make sense to merge the entity with us so that we have combined benefits of the revenue.''
The acquisition of Satyam Cineplex has strengthened Inox Leisure's presence in North India, where PVR is a dominant player.
Since Satyam is a 100 percent subsidiary, there won't be any additional share issue, Asher said, adding that the move will lead to improved revenues and bottomline. He said that post-deal, the company would be able to negotiate better with supply chain.
10:20am Market Expert
Traditionally, the second half of the year has always been better for the markets than the first half. But this year, Sanju Verma, CEO, Violet Arc Global Managers expects September and October to be months of consolidation for the Indian market. She says the market most likely will continue its upmove from November.
She says perhaps the government should not be too worried about the bypolls and it should see it as losing a few battles, if it comes to that, to win the war and it has already won the war, considering the NDA won with an absolute majority in the Lok Sabha elections for the first time in three decades. She expects the government to table a few good bills during the winter session, including GST.
According to Verma, if there is one thing that can derail the equity markets, it is the geopolitical tensions.
10:00am Equity benchmarks rebounded smartly with the Sensex rising 210.31 points to 26841.60 and the Nifty advancing 65.15 points to 8040.65 supported by broadbased rally.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining 1 percent and 1.8 percent, respectively. About four shares advanced for every share declining on the Bombay Stock Exchange.
Shares of Reliance Industries, ITC, HDFC, Larsen and Toubro, Sun Pharma, ONGC, Hero Motocorp, Dr Reddy's Labs, Wipro and Maruti Suzuki rallied 1-2 percent followed by ITC, ICICI Bank and SBI with 0.8 percent gain.
However, Infosys (down 1.3 percent), Mahindra and Mahindra (down 0.4 percent) and Hindustan Unilever (down 0.25 percent) underperformed.
The market priced in FOMC meet outcome, which was on expected lines, say experts.
Michael Gapen, Barclays says the September FOMC decision was in-line with expectation. "That said, Chair Yellen stated clearly that rates could go higher sooner if economic performance results in a faster convergence towards the committee's objectives than currently expected," he adds.
9:50 am Market check: The market made a U-turn just within 30 minutes of trading. The Sensex is up 218.88 points or 0.82 percent at 26850.17, and the Nifty is up 65.60 points or 0.82 percent at 8041.10. About 1471 shares have advanced, 424 shares declined, and 40 shares are unchanged.
Sun Pharma, Cola India, Hero and ONGC gain around 2 percent while Infosys, HUL and M&M are still losers in the Sensex.
9:35 am Buzzing: Pharma major Sun Pharmaceutical Industries today entered into a licensing agreement with Merck & Co Inc for investigational therapeutic antibody candidate, tildrakizumab to be used for treatment of plaque psoriasis. Under terms of the agreement, Sun Pharma will acquire worldwide rights to tildrakizumab for use in all human indications from Merck in exchange for an upfront payment of USD 80 million, the companies said in a joint statement.
Tildrakizumab is being evaluated in Phase III registration trials for the treatment of chronic plaque psoriasis, a skin ailment.
The market has opened in red after Fed Reserve Chairman Janet Yellen's clarification that the timing of rate hikes will be highly conditional and based on the Fed's assessment of the economy.
The Sensex is down 85.21 points at 26546.08 and the Nifty is down 24.85 points at 7950.65. About 381 shares have advanced, 264 shares declined, and 25 shares are unchanged.
Infosys, Axis Bank, L&T, Sesa Sterlite and NTPC are major laggards while Sun Pharma, Dr Reddy's Labs, Cipla, HDFC and Bajaj Auto are top gainers in the Sensex.
The Indian rupee slipped in the opening trade. It fell by 18 paise to 61.10 per dollar versus previous day's closing value of 60.92 a dollar.
The dollar rose to its highest in over four years against a basket of currencies after the Federal Reserve's guidance on interest rates highlighted the diverging pathways between the United States and other rich nations.
Mohan Shenoi of Kotak Mahindra Bank said, "The FOMC move has resulted in a dollar rally against major currencies. Consequently dollar is expected to mildly strengthen against the rupee. The rupee is expected to trade in a range of 60.80-61.20/dollar today."
US stocks rose, with the Dow ending at a record and the S&P 500 back above 2,000 after the Federal Reserve said it was nearing the end of its asset purchases and reiterated it would not hike interest rates for a 'considerable' period. However, they pared some gains after Janet Yellen clarified that the timing of rate hikes will be highly conditional.
Also, in less than 24 hours, the people of Scotland will vote on whether they want to remain in the United Kingdom. But top banks and many corporates warn that an independent Scotland may lose out on investments.
Back home, president Xi Jinping is in India with a promise of investing a whopping USD 100 billion. India and China inked three pacts - China will invest USD 10 billion to set up industrial parks in Ahmedabad and Pune.
Asian shares were mixed on Thursday as slowing property prices in China offset relief over the US Federal Reserve's accomodative policy stance.