Sensex rises 116 points; ITC, Tata Motors, ONGC rally 3-4%
22 September 2014
Equity benchmarks bounced back in last couple of hours of trade on Monday with the Sensex closing above 27000 level and Nifty above 8100-mark supported by ITC, Tata Motors, ONGC and HDFC.
Overall it was a consolidation day ahead of expiry of September series' derivative contracts (on Thursday) and the market reported total turnover of Rs 5.9 lakh crore, the fifth highest ever.
The 30-share BSE Sensex climbed 116.32 points to 27206.74 and the 50-share NSE Nifty rose 24.85 points to 8146.30. The broader markets gained too, with the BSE Midcap and Smallcap indices rising 0.2 percent and 0.5 percent, respectively.
The market continued to be in consolidation mode ahead of expiry, say experts, adding, the upside may continue in near term. However, if upcoming by-polls in Maharashtra and Haryana disappoint, then there is a possibility of some correction.
''Market has lot of expectations. It expects everything to be aligned very quickly. So, if this political news is not in pink of health then the market can definitely get nervous,'' said Sandeep Bhatia, Executive Director and Head of Sales at Kotak Institutional Equities.
Bhatia expects another 10-15 percent returns in the market till next Budget. He believes the economy is on an upturn and sees Diwali to be great from consumer spending angle.
Tata Motors, the commercial vehicle maker and the owner of luxury car maker Jaguar Land Rover, topped the buying list, up 4 percent followed by cigarette major ITC with 3 percent.
State-run oil and gas explorer ONGC was up 3.5 percent as the company will begin oil production from KG block in 2019. Housing finance company HDFC and top lender State Bank of India climbed 1 percent each while rival ICICI Bank advanced 0.44 percent.
However, shares of Infosys, Sun Pharma, Cipla, Tata Steel, Wipro, BHEL, Hindalco Industries, NTPC and Tata Power were down 1-2 percent.
In the midcap space, PC Jeweller, Delta Corp, Ananj Raj, Jaiprakash Associates, NBCC, GSFC, Gitanjali Gems, Container Corporation, Ramco Cements and Ashok Leyland surged 3-20 percent.
However, Suzlon Energy, Bharti Infratel, Bhushan Steel, Torrent Power, Financial Technologies, Century Textiles, Unitech and OBC fell 2-10 percent.
Advancers beat decliners on the Bombay Stock Exchange by a ratio of 1704 to 1347.
03:30 pm Market closing: After a major tiff with the bears, the market ended on a higher note. The Sensex was up 116.32 points at 27206.74, and the Nifty was up 24.85 points at 8146.30.
About 1671 shares have advanced, 1381 shares declined, and 92 shares were unchanged.
Tata Motors was up 4 percent while ONGC and ITC gained over 3 percent each. Hero Moto and GAIL were other gainers in the Sensex.
Among the laggards were Cipla, BHEL, Tata Steel, Infosys and Hindalco. Metal index was down over 1 percent.
03:00 pm Force Motors in Focus
Shares of Force Motors are locked at 20 percent upper circuit hitting record high at Rs 1184.90 per share.
Investors are bullish on the stock as its management exuded confidence at its annual general meeting (AGM) held in the weekend. The company is expecting its revenues to quadruple in five years with good traction seen in exports. It is looking to increase exports to 15-20 percent from current 5 percent.
The company is also hoping to see good traction for its off-road powerhouse Force Gurkha. The Gurkha launched three years ago, is likely to hit Indian market by September-end. Styled on the lines of the legendary Mercedes G-Wagen, the Gurkha is armed with a powerful Mercedes derived turbo-charged engine. The vehicle with snorkel-exhaust is roughly priced at R 6.5-8.5 lakh per unit.
02:45pm ADF Foods up 8%
Manufacturers of Indian pickles, chutneys, frozen foods, masalas, spices, ready-to-eat foods, ADF Foods has re-entered the domestic market after 10 years. Bimal Thakkar, Managing Director, ADF Foods expects the domestic business to contribute an ambitious 40 percent of revenue by 2020.
The company plans to invest Rs 100 crore in domestic business in the next five years and targets revenue of Rs 1,000 crore by 2020. It sees FY15 revenue at Rs 250 crore and plans to break-even in FY15. Thakkar also expects to see a turnaround in EBITDA margin from FY15. EBITDA margins expected to return to 15 percent in the next five years.
The company also plans to expand its export business and introduce more distributors in the US and Europe. He expects the US subsidiary to grow by 30-40 percent this fiscal year. The company is also exploring inorganic opportunities in the US.
02:30pm Silver, Gold Update
Silver's sell-off extended to a second session on Monday, with the metal tumbling to a four-year low, as investors unwound long positions amid strength in the dollar and the possibility of a sooner-than-expected US rate hike.
Weakness in gold, which fell to its lowest since January and was edging close to breaking below USD 1,200 an ounce, also weighed on silver and other precious metals.
The precious metals group has seen sharp losses in recent days as the dollar index hit a four-year high last week on expectations the world's biggest economy will see the start of its rate-tightening cycle sooner-than-expected.
02:00pm Equity benchmarks bounced back in afternoon trade supported by ITC, Tata Motors, ONGC and major banks. The Sensex climbed above the 27000 level, up 74.39 points at 27164.81 while the Nifty reclaimed 8100, up 9.80 points at 8131.25.
The broader markets gained strength with the BSE Midcap and Smallcap indices rising 0.4 percent and 0.8 percent, respectively. About 1639 shares have advanced, 1293 shares declined, and 100 shares are unchanged.
Commercial vehicle maker Tata Motors topped the buying list, up 4 percent followed by ITC and ONGC with 2.5-3 percent. Major lenders State Bank of India and ICICI Bank jumped over a percent while rival Axis Bank gained 0.8 percent.
However, Cipla kept its top position in the selling list, down 2.5 percent followed by Infosys, HDFC Bank, TCS, Tata Steel, M&M, Sun Pharma, BHEL, Sesa Sterlite, Wipro, NTPC and Hindalco with 0.8-2 percent.
1:50 pm Interview: Alibaba IPO that began trading on the New York Stock Exchange (NYSE) on Friday saw a stellar opening . The stock opened trade at USD 92.70 per share and rallied upto 38 percent in a single day. The e-commerce company's strong trading took many by surprise, but is also the reason for Indian online retailers' cheer. Rohit Bansal, chief executive officer, Snapdeal.com says this IPO validates the belief in emerging market and the fact that online retailers don't need to own inventory to be successful.
''The response to Alibaba IPO gives confidence to company like ours, but the conventional way of valuations may not work for e-commerce sites as their growth is more than 50 percent at a time when other companies report below 15-20 percent growth,'' adds Bansal. Adding to Bansal's optimism is Henry Guo, senior research analyst, JG Capital who says such companies have huge potential as India continues to see mobile penetration in widespread areas.
1:30 pm Buzzing: Investors continued to sell shares of Bharti Infratel Monday on media reports that the shareholder Kohlberg Kravis Roberts and Company (KKR) may sell its entire 2.38 percent equity stake (or 4.5 crore equity shares) soon. The stock lost more than 4 percent intraday. "American private equity fund KKR is set to launch a share sale that could raise about USD 230 million as it exits Bharti Infratel six years after investing, taking advantage of a sharp rebound in the valuations of the telecom tower company," said a media report quoting unnamed sources, adding the share sale will be via block trades on the stock exchanges.
In India, the company has over 35,000 towers, across 18 states, and 11 telecom circles. It also has a 42 percent stake in Indus Towers which was created as a joint venture between Bharti Infratel, Vodafone and Aditya Birla Telecom to hive off the towers business in 15 telecom circles.
Diwali sparkle: Gold stocks up ahead of festivals, wedding
The market has made slight recovery as the Nifty reclaims the crucial 8100-level. The 50-share index is 8111.15, down 10.30 points. The Sensex is up 12.53 points at 27102.95. About 1546 shares have advanced, 1289 shares declined, and 99 shares are unchanged.
Tata Motors, ITC, ONGC, ICICI Bank and Hero MotoCorp are top gainers in the Sensex. Among the losers are Cipla, BHEL, Tata Steel, Hindalco and Infosys.
Silver's sell-off extended to a second session on Monday, with the metal tumbling to a four-year low, as investors unwound long positions amid strength in the dollar and the possibility of a sooner-than-expected U.S. rate hike.
Weakness in gold, which fell to its lowest since January and was edging close to breaking below USD 1,200 an ounce, also weighed on silver and other precious metals. The precious metals group has seen sharp losses in recent days as the dollar index hit a four-year high last week on expectations the world's biggest economy will see the start of its rate-tightening cycle sooner-than-expected.
12:59pm Market check
The market recovered losses in afternoon trade with the Sensex falling 36.18 points to 27054.24 and the Nifty declining 20.20 points to 8101.25.
About 1522 shares have advanced, 1276 shares declined, and 89 shares are unchanged.
12:40pm Bharti Infratel in News
Investors continued to sell shares of Bharti Infratel on Monday on media reports that the shareholder Kohlberg Kravis Roberts and Company (KKR) may sell its 2.38 percent equity stake soon. The stock lost more than 3 percent.
"American private equity fund KKR is set to launch a share sale that could raise about USD 230 million as it exits Bharti Infratel six years after investing, taking advantage of a sharp rebound in the valuations of the telecom tower company," said a media report quoting unnamed sources, adding the share sale will be via block trades on the stock exchanges.
The Sensex declined over 80 points while Eveready Industries surged 3 percent.
Amritanshu Khaitan, ED, Eveready says the company is not looking at any further price hikes in the near-term. The company had take a price hike in July for premium AAA batteries.
Khaitan says the free cash flow (FCF) for the company is expected to jump to Rs 100 crore from the current Rs 50 crore on back of price hikes. The company hopes to pare debts from these FCF funds, adds Khaitan.
As of now the input prices have been stable but in case the prices increase the company plans to pass it on to customers, says Khaitan.
According to him, the company does not require large capex amount in the near-term although the ad spends for the current year have increased.
12:00pm The market remained under pressure on weak Asian cues. The Sensex fell 102.67 points to 26987.75 and the Nifty declined 40.60 points to 8080.85 dragged by defensives like IT and healthcare while Asian peers like Shanghai and Hang Seng lost over a percent.
About 1450 shares have advanced, 1267 shares declined, and 84 shares are unchanged.
Sandeep Bhatia of Kotak expects another 10-15 percent returns till next budget. In the near term, his focus remains on curtailment of energy subsidy and gas price hike. However, he feels higher energy prices will be the only possible risk for the market.
Force Motors (up 15 percent), ITC, Jubilant Foodworks, JK Tyre (up 4 percent), Tata Elxsi, Infosys, Tata Motors, SBI and Sun Pharma were most active shares on exchanges.
PNB gains more than a percent after its board approved exploring avenues for raising funds via the QIP, FPO or rights issue. The board also approved a stock split of 1:5. The management told CNBC-TV18, the stock split is to improve retail participation in the counter.
Bharti Infratel fell over 3 percent as reports suggest that KKR is looking to exit its 2.38 percent equity stake in the company via a share sale and raise USD 232 million.
11:55 am Market outlook: UR Bhat, MD, Dalton Capital Advisors believes the market currently seems to be consolidating at around 8000 levels. The next move for the market is only likely after the credit policy on September 30 and the half yearly results. According to him with lack of positive triggers, it would be difficult for the Nifty to breach 8250 level and would be rangebound between 7,850 and 8,250, given the macro situation and unlikely rate cut.
With regards to sectors that could out perform going forward, he thinks cyclicals would continue to be the favourites especially with renewed hopes of an economic revival, policy momentum and so advices buying them on dips.
11:30 am interview: Artificial leather maker Mayur Uniquoters expects to see a 15-20 percent growth this fiscal year. The company is adding two new units to production in the second half of FY15, says CMD and CEO Suresh Kumar Poddar. He sees 25 percent growth in the exports segment this fiscal, while adding that margins are better in exports than domestic segment.
The company saw sustained operational performance aided by rising share of exports. As of now, 50 percent of the company's total turnover comes from the footwear industry, followed by automotive at 35 percent and lastly leather goods, furnishing, bags, etc., contribute 15 percent. Poddar sees FY15 capex at around Rs 70 crore.
The market is still going lacklustre as the Sensex is down 91.77 points at 26998.65, and the Nifty is down 39.10 points at 8082.35. About 1402 shares have advanced, 1077 shares declined, and 79 shares are unchanged.
Cipla, Tata Steel, Hindalco, Infosys and Dr Reddy's Labs are major losers while Tata Motors, ONGC, Hero MotoCorp, ITC and Bajaj Auto are top gainers in the Sensex.
Brokers said increased selling by funds and retail investors in the recent out-performers amid a subdued trend at other Asian bourses on profit-taking, mainly dampened trading sentiment. Among other Asian markets, Japan's Nikkei Index was down by 0.81 percent, while Hong Kong's Hang Seng index shed 1.34 percent in early trade.
Brent crude fell below USD 98 a barrel, down for the third session in four, as sluggish demand and abundant supplies outweighed a possible cut in oil output from the Organisation of the Petroleum Exporting Countries (OPEC).
Comments from OPEC's secretary general last week that the group could cut output next year buoyed Brent on Friday, but investors' attention turned back to the gloomy economic outlook in Europe and China which has curbed oil demand.
The Sensex fell 106 points to 26984 while Mayur Uniquoters gained nearly 2 percent.
Artificial leather maker Mayur Uniquoters expects to see a 15-20 percent growth this fiscal year. The company is adding two new units to production in the second half of FY15, says CMD and CEO Suresh Kumar Poddar.
He sees 25 percent growth in the exports segment this fiscal, while adding that margins are better in exports than domestic segment. The company saw sustained operational performance aided by rising share of exports.
As of now, 50 percent of the company's total turnover comes from the footwear industry, followed by automotive at 35 percent and lastly leather goods, furnishing, bags, etc., contribute 15 percent.
Poddar sees FY15 capex at around Rs 70 crore.
Mayur Uniquoters' sixth production line will be operational by December 2014.
10:25am Market Expert
Sandeep Bhatia, Executive Director and Head of Sales at Kotak Institutional Equities believes that markets are currently ''in sideways to slightly down'' phase. Though he does not see any major uncertainties in the near term, he feels upcoming by-polls in Maharashtra and Haryana, may have some impact.
''Market has lot of expectations. It expects everything to be aligned very quickly. So, if this political news is not in pink of health then the market can definitely get nervous,'' he said.
Bhatia said the government is not looking at making any major changes in reforms, and sees higher energy prices as only possible risk for the market.
Kotak Institutional Equities in its India strategy note has said that it does not expect Indian markets to deliver meaningful returns over the next 4-6 months. It says that if the market was to go up further without any meaningful changes to earnings, it would use the opportunity to 'sell'.
Bhatia expects another 10-15 percent returns in the market till next Budget, but feels the strong fund flows will continue. He believes the economy is on an upturn and sees Diwali to be great from consumer spending angle.
10:00am Equity benchmarks pared some early losses with the Sensex falling 97.54 points to 26992.88 and the Nifty declining 36.85 points to 8084.60. However, the broader markets outperformed.
The BSE Midcap and Smallcap indices gained 0.3 percent and 0.5 percent, respectively. Advancing shares outnumbered declining ones by a ratio of 1206 to 880 on the BSE.
Drug makers Cipla and Dr Reddy's Labs topped the selling list, down 2 percent each. Rival Sun Pharma declined 1 percent. Shares of Infosys, HDFC, HUL, TCS, HDFC Bank, Tata Steel, Wipro, NTPC, Sesa Sterlite, BHEL and Bharti Airtel gained 0.5-1 percent.
Commercial vehicle maker Tata Motors and two-wheeler manufacturer Hero Motocorp bucked the trend, up over 1.5 percent followed by ONGC, L&T, SBI, Bajaj Auto and Coal India with 0.2-0.7 percent.
In the midcap space, Atul, Chennai Petroleum, Sterlite Technology, Delta Corp and GSFC rallied 4-7 percent whereas Jyothy Labs, SREI Infra, IIFL Holdings, Sadbhav Engineering and HT Media lost 2-5 percent.
9:55 am Market opinion: Rakesh Arora, Macquarie says markets have jumped up to a new high driven by a dovish statement by Fed and resultant short covering.
''All eyes now are on the Supreme Court judgment on coal blocks and Government's response. There are more chances of disappointment in the near term, which can rein in this rally,'' he adds.
9:45 am Buzzing: Shares of Aegis Logistics lost over 2 percent intraday on Monday after it announced to sell 40 percent stake in its Singapore-based subsidiary Aegis Group International to ITOCHU Petroleum Co. Singapore for USD 5.85 million.
"In order for Aegis to strengthen its competitive position in LPG sourcing, supply and shipping and also to support the company in building new LPG import terminal capacity in the future, the management proposesto establish a joint venture with ITOCHU Corp, " it said in a statement
ITOCHU Corp is a Japanese multinational trading group specialising in oil and gas, metals and other commodities.
9:30 am FII view: Ignore short-term volatility and continue to remain invested in the market, is the word coming in from BP Singh of Pramerica Mutual Fund. He, however, does not rule out short-term corrections in the market. According to him, every bull run is always accompanied by very sharp short-term corrections.
"But investors should ignore this, pick their stocks and stay invested," he says. He says fundamentals are improving fasted than anticipated. Singh says the Indian rupee has appreciated against most currencies, on the back of which exports may take a hit and export-oriented companies may see some discomfort. But all these issues are likely to be short-term.
The market has kick started the week on a weak note. The Sensex is down 144.25 points at 26946.17 and the Nifty is down 37.00 points at 8084.45. About 394 shares have advanced, 392 shares declined, and 32 shares are unchanged.
Bajaj Auto, Hindalco and TCS are gainers while BHEL, Tata Steel, Coal India, Tata Motors and NTPC are major laggards in the Sensex.
The Indian rupee opened flat at 60.85 per dollar versus 60.81 on Friday.The dollar rose against a basket of major currencies on Friday as investors bet that US interest rates would rise more quickly than expected.
Agam Gupta of Standard Chartered said, "Expect the rupee to trade in a range of 60.70-61/dollar for the day. Expect local banks to buy the USD below 60.80, hence putting a floor at 60.70. Exporters and capital inflows are expected to sell USD on any uptick towards 61.''
In commodities, crude prices declined on continued concerns about ample supply at a time of weak global economic data and fragile demand.
Precious metal gold is trading around USD 1217, down nearly 1 percent on Friday as the dollar was buoyed by a decline in US jobless claims.
Shanghai market lost 0.7 percent in early trade today as eye the Chinese manufacturing sector data that will come out on Tuesday.