S&P upgrade lifts Sensex 158 points; Hindalco, Sun, JSPL zoom

India's credit outlook upgrade by S&P helped the equity benchmarks recover in late trade and snapped three-day losing streak on Friday. Indices fell nearly 3 percent in previous three sessions due to Supreme Court's coal verdict, deferral of gas pricing and geopolitical tensions.

The 30-share BSE Sensex climbed 157.96 points to close at 26626.32 while the 50-share NSE Nifty managed to hold the important support level of 7850, up 57 points at 7968.85.

Standard & Poor's Ratings Services today revised its outlook on India to stable from negative. However, earlier in April 2012, the rating agency had cut India's outlook to negative.

It affirmed 'BBB-' long-term and 'A-3' short-term unsolicited sovereign credit ratings on India. It also affirmed transfer and convertibility assessment of 'BBB+'.
 
''India's improved political setting offers a conducive environment for reforms, which could boost growth prospects and improve fiscal management. Its external position is a key credit strength and well-entrenched democratic political system is another credit support,'' it reasoned.

The rating agency could raise the rating if the economy reverts to a real per capita GDP trend growth of 5.5 percent per year and fiscal, external, or inflation metrics improve.

''The change in rating indicates amplified conviction in the government's intent and ability to make changes for growth. It also implies belief that budgeted fiscal targets are more likely to be met,'' said Jayant Manglik, president-retail distribution, Religare Securities.

According to him, investor confidence will move up a notch along with the rating and this essentially means money waiting on the sidelines will now come into India.

S&P also revised outlook on six Indian companies to stable from negative, which are Reliance Industries, NHPC, NTPC, Power Grid, TCS and ONGC.

Banks (especially PSU banks) rallied smartly with the BSE Bankex rising 2 percent and CNX PSU Bank index gaining 3 percent. India's largest lender State Bank of India and its rivals HDFC Bank and Axis Bank surged 2-3 percent.

Metal stocks too rebounded with the BSE Metal index climbing 2.5 percent aided by Hindalco Industries and Tata Steel with 5 percent and 3 percent upside, respectively. Hindalco on Thursday clarified that there will be no major impact on earnings due to coal verdict announced by Supreme Court. Jindal Steel too gained 5 percent.

Sun Pharma surged over 4 percent on hopes of not getting import alert from USFDA for its Halol factility in Gujarat. Submission of Form 483 means the FDA team found certain procedural issues with respect to the plant's running and seeks corrective action but will likely not imply an immediate import ban.

In the midcap space, Mangalore Chemicals, Indiabulls Real, Jaiprakash Power, Voltas, Unitech, SAIL, Syndicate Bank, REC, PTC India Financial and City Union Bank shot up 6-20 percent.

The market breadth also improved in late trade as 1570 shares advanced while 1397 shares declined on the BSE.

03:30 pm Market closing: S&P boosted investor sentiment which spiked the market in last hour of trade before wrapping up for the weekend. The Nifty ended at 7968.85, up 57.00 points while the Sensex was up 157.96 points at 26626.32. About 1585 shares advanced, 1376 shares declined, and 89 shares were unchanged.

03:10 pm Global markets: The dollar held near a four-year high against a basket of currencies on Friday, fuelled by the biggest yield advantage over the euro in nearly 15 years as the Federal Reserve contemplates hiking interest rates.

European equities fell to trade close to a one-month low as a sharp sell-off in U.S. and Asian markets prompted caution among investors on the last trading day of the week.

03:00 pm Market check: The market has surged on positive sentiment. The Sensex is up 178.14 points at 26646.50 and the Nifty is up 60.80 points at 7972.65. About 1392 shares have advanced, 1485 shares declined, and 89 shares are unchanged. Sun Pharma, Hindalco, Axis Bank, Tata Steel and M&M are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, GAIL, HDFC, Hero and Maruti.

02:42 pm Upgrade: Global rating agency Standard & Poor's (S&P) has upgraded India's credit outlook to stable from negative.

S&P said that CAD has improved in recent months post gold import curbs. The rating agency sees India's FY15 CAD widening from low of 1.8 percent of GDP. S&P earlier rated India as 'BBB-', the lowest in the investment grade, with a negative outlook. Moody's assigns a 'Baa3' rating on India, with a stable outlook. Fitch has affirmed India's long-term foreign and local currency issuer default rating (IDR) at 'BBB-' with stable outlook, indicating low default risk.

Equity benchmarks continued to be rangebound in afternoon trade with the Sensex rising 32.52 points to 26500.88 and the Nifty advancing 12.25 points to 7924.10.

About 1162 shares have advanced, 1638 shares declined, and 85 shares are unchanged.

Shares of Sun Pharma and Hindalco Industries topped the buying list, up 4-5 percent followed by HDFC Bank, ONGC, L&T, Axis Bank, M&M, SBI, Tata Steel and NTPC with 1-3 percent upside.

However, HDFC, ICICI Bank and Gail India were top losers, down over 2 percent. ICICI Bank, TCS, HUL, Hero Motocorp and Maruti fell 1-1.9 percent.

Petronet LNG, Godrej Industries, SBI, Sun Pharma, Reliance Industries, ICICI Bank, Infosys and Tata Motors were most active shares.

In the midcap space, Indiabulls Real, City Union Bank, Bhushan Steel, IOB and Kaveri Seed rallied 4-7 percent while IIFL Holdings, CRISIL, JK Cement, Rajesh Exports and Trinity Trade lost 5-9 percent.

Among smallcaps, Mangalore Chemical, Visagar Polytex, UB Holdings, Prakash Industries and Matra Kaushal were up 7-20 percent whereas SV Global Mill, Usha Martin, Tata Sponge, Phoenix Lamps and Indian Metals slipped 6-10 percent.

01:59pm Market Expert
Manas Jaiswal, Technical Analyst at manasjaiswal.com said at current levels also, one can go short on Nifty with a stop loss of 7925.

"Nifty has started making lower tops and lower bottom on the daily charts. The first support is at 7860, which is 50 percent retracement level of entire rally from 7540 to 8180. I think looking at the pattern Nifty can break that support also and it can go down to around 7784 that is 61.80 percent retracement level," he elaborated.

01:30pm JSW in focus
JSW and Arcelor Mittal have completed due diligence for European steel maker Ilva.
Ilva's valuation has been pegged between USD 400 to 500 million and JSW and Arcelor Mittal will be submitting the binding bids for the same next week.

However, sources says JSW may emerge the frontrunner for the company's sellout.

Ilva was earlier valued at USD 800 million but its valuation was slashed due to stressed assets. JSW and ArcelorMittal refused to comment on the development.

01:00pm Market Check The market is extremely volatile with the Nifty hovering around 7900. The Nifty is down 39.10 points at 7872.75. The Sensex slips 163.40 points at 26304.96. About 930 shares have advanced, 1780 shares declined, and 84 shares are unchanged.

Metals and pharma are seeing good buying interest. Sun Pharma, Hindalco, Tata Steel, ONGC and Axis Bank are top gainers in the Sensex. Among the losers are GAIL, Hero MotoCorp, HDFC, Cipla and Maruti Suzuki.

Ruchir Sharma of Morgan Stanley says he is nervously optimistic about India while Samir Arora of Helios Capital believes that the market is still not expensive at current valuations.
 
Top bullion consumer China has been importing more gold in September than in the previous month due to demand from retailers stocking up for the upcoming National Day holiday, market sources said, reports Reuters.

Demand in India - the second biggest buyer of the metal - is also set to pick up as the festival and wedding season kicked off this week. With gold trading close to a key psychological level of USD 1,200 an ounce, markets are keenly watching physical demand in Asia - the top consuming region - to see if it could lend support to prices.

12:55pm IDBI Bank sees no strees in JP Associates account
The Sensex fell 175 points in afternoon trade while IDBI Bank gained marginally and Jaiprakash Associates jumped 4 percent.

MS Raghavan, Chairman & Managing Director of IDBI Bank says the company has Rs 8000 crore exposure to JP Associates but has not seen any stress in the account.

''We has not seen any case of default in this particular account,'' says Raghavan in an interview to CNBC-TV18.

JP Associates tanked on Thursday on news that its arm Jaiprakash Power Ventures (JPVL) said the company had called off talks with Anil Dhirubhai Ambani Group (ADAG) for sale of its hydro power assets. However, the stock bounced back today after JSW Energy signed MoU with JP Power to buy three power plants.

Speaking on the status of the deallocated coal blocks' accounts, Raghavan says the bank
has Rs 3,100 crore exposure to companies impacted from the Supreme Court order. However, of this, only Rs 1000 crore exposure to two accounts might be vulnerable, he adds.

12:40pm Why Hindalco gain?
Supreme Court on Wednesday cancelled 214 coal blocks allocated by government since 1993 to 2010 but exempted four coal blocks (including Sasan UMPP, NTPC and SAIL).

The company had been allocated four coal blocks, which are Mahan coal block jointly with Essar Power, Tubed coal block jointly with Tata Power, Talabira II & III coal blocks jointly with Mahanadi Coal Fields and Nayveli Lignite Corporation, and Talabira I coal block.

Mahan, Tubed and Talabira II & III Coal blocks are not yet in operation while Talabira I coal block feeds coal to the power plant which supplies power to Company's Hirakud Smelter, the company said in its filing to BSE on Thursday during market hours.

Post market hours yesterday, the aluminium major clarified that SC cancelling coal block allocation will have 1-time impact on company of Rs 500 crore.

"We are not expecting the captive coal immediately. We have plans to operate on purchased coal. However, the only incremental impact of coal blocks cancellation to be on cost of production at Hirakud smelter, which is not expected to be significant," it said.

12:20pm Interview
Auto components maker Rico Auto has announced the sale of its 50 percent stake in FCC Rico to its Japanese partner, FCC Company, for Rs 495 crore on Thursday. The 50:50 joint venture was for manufacturing and supplying automobile clutch assemblies.

In an interview to CNBC-TV18, Arvind Kapur, Chairman and Managing Director of Rico Auto, said the company signed the deal on Thursday and has even informed the stock exchanges.

''We had a technical collaboration with FCC since 1985. In 1996, we formed a JV with them for the components. The growth has been pretty good in the company. Rico was primarily an investor there with 50 percent equity. But they are the technology provider and wanted to go it alone. Thus we very amicable settled the prices,'' Kapur said.

Rico Auto had initially invested Rs 3.95 crore in the JV in 1996-97. The company will use the fund to pay off its debt, which currently stands at around Rs 350-375 crore, Kapur said.

Apart from FCC, the company has JVs with Canadian firm Magna and Chinese company Zhejiang Jinfei. When asked whether the company is looking to sell any more stake in other JVs just yet, Kapur replied in negative.

12:00pm Market Check
Equity benchmarks extended lossed amid consolidation in noon trade. The Sensex slipped 168.78 points to 26299.58 and the Nifty declined 48.30 points to 7863.55. The BSE Midcap and Smallcap indices lost around 0.7 percent.

About 1019 shares have advanced, 1583 shares declined, and 86 shares are unchanged.

Ritu Arora, director of investments at Canara HSBC OBC Life, sees the current downside in the market as an opportunity for new investors to enter the market, though not just yet. She sees more sectoral re-allocation and perhaps another 4-5 percent downside, which will give better investment opportunities.

Shares of HDFC, ICICI Bank, Hero Motocorp, Maruti Suzuki, Cipla, Sesa Sterlite and Punjab National Bank were prominent losers, falling 2-3 percent. ITC, TCS, Tata Motors, State Bank of India, Dr Reddy's Labs, HUL and Bajaj Auto declined 0.9-1.7 percent.

However, Sun Pharma kept its top position in the buying list, up 4 percent on hopes that the company may not get import alert for Halol facility though it received Form 483. Ranbaxy Labs, which may become a subsidiary of Sun soon, rallied 6 percent.

ONGC, Mahindra and Mahindra, Hindalco Industries and Tata Steel were up 1-3 percent.

11:45 am Exclusive interview: India's largest lender State Bank of India has more than Rs 4000-crore exposure to companies that will be impacted by the recent Supreme Court judgement quashing 214 coal blocks. The bank has a loan exposure of Rs 4341 crore to six companies whose coal mines have been deallocated. Arundhati Bhattacharya, chairman of SBI does not believe that the entire exposure will be written off. She does not see loans extended to power plants turning into bad loans.

"Have to see what coal linkages these companies get," she told CNBC-TV18. The government has promised linkages despite cancellation of mines. SBI's exposure to large companies such as JSPL and Hindalco stands at Rs 21,000 crore, while the same for Usha Martin and others stands at Rs 5,000 crore.

11:30 am market outlook: Technology is the top pick in my portfolio at the moment, Helios Capital founder and 11:fund manager Samir Arora said in an interview to CNBC-TV18. He said some of the best IT stocks were available for 14 times earnings, compared to the frontline stocks in other sectors which were going for anywhere between 25-40 times earnings. Arora said he was not in a hurry to buy beaten down cyclicals or state-owned banks because reform measures would take a bit longer to play out, than what the market was anticipating. In short, he was not bullish on any stock where the performance depended on some particular event, either policy-related or some micro development.

Apart from technology, Arora is bullish on pharma and select auto shares. His fund has reduced exposure to private banks. He said he was bearish on logistics companies and Indian internet stocks, one of which he has already short sold. On the whole, he said the market was not expensive, but investors had to be choosy about what they were buying.

The market is absolutely flat as weak global cues, the recent streak of FII selling and impact of the Supreme Court verdict on coal blocks remains an overhang.

The Sensex is up 2.96 points at 26471 and the Nifty is down 0.35 points at 7911.50.
About 1148 shares have advanced, 1182 shares declined, and 77 shares are unchanged.

Sun Pharma is up 6 percent, reversing its early morning losses reacting to a Credit Suisse note that says the comoany has received the form 483 for the Halol plant. It lists 23 observations with no data integrity issues. Hence chances of an import alert are low now.

Hindalco, ONGC, Tata Steel and M&M are top gainers in the Sensex. Among the losers are HDFC, Coal India, Sesa Sterlite, TCS and Hero MotoCorp.

Globally, Asian markets are mostly weak reacting to the US sell off.  The dollar is at near-four-year highs against a basket of major currencies. Month-end dollar demand from importers also hurting the rupee.

10:55am Interview
The Sensex declined 2.46 points to 26465.90 and the Nifty fell 1.30 points to 7910.55 while Jindal Steel and Power (JSPL) lost a percent to Rs 173.

Ravi Uppal, MD & CEO, JSPL said the penalty asked is unfair and the company will be making a review petition with the Supreme Court. They would also be asking the court for staggering payment option.

He said the company would go in for competitive bidding for the coal blocks that the company already holds in case the mines are auctioned. At present they are eagerly awaiting clarity from the government on auctioning.

''I believe government will act soon on auctioning, and it may not remain an open issue after March 31, 2015,'' he said.

According to him, the government will help in supply of coal post, March 31, 2015.

10:30am Sun Pharma in Focus
Sun Pharma recouped early losses, up over 3 percent. It had shed 3 percent in early trade after Credit Suisse in its note said the company has received the Form 483 for the Halol plant.

US Food and Drug Administration lists 23 observations with no data integrity issues hence the chances of an import alert are low now. The observations are mostly procedural issues where resolution may take time and there is a possibility of approvals being blocked in the near term.

10:00am The market bounced back in morning trade with the Sensex rising 27.59 points to 26495.95 and the Nifty gaining 14.75 points at 7926.60 supported by buying in most beaten down sectors like oil & gas, metals, auto and select banks.

The broader markets too rebounded with the BSE Midcap and Smallcap indices advancing 0.2 percent and 0.6 percent, respectively. About 1043 shares have advanced, 954 shares declined, and 53 shares are unchanged.

Deven Choksey of KR Choksey Shares & Securities does not see a rough ride for market in the October series. He says fundamentals – market as well as on the macro front – continue to remain strong and chances are it will only improve further.

"Whenever the market runs ahead of time, it gets into a consolidation mood, I think that is what the market is doing right now," he told CNBC-TV18.

Choksey advises investors to use every dip as a buying opportunity. He believes investors should look at all those companies where the fall is maximum.

Hindalco Industries topped the buying list, rising over 3 percent followed by L&T, ONGC, M&M, Tata Steel, Bajaj Auto and DLF with 1-2 percent gains. Reliance Industries, State Bank of India, HDFC Bank, Axis Bank, Sun Pharma, Wipro and NTPC were up 0.5-0.9 percent.

However, HDFC, ITC, Infosys, ICICI Bank, HUL, Cipla, Hero Motocorp, Bharti Airtel, Dr Reddy's Labs, Coal India and Sesa Sterlite fell 0.3-1 percent.

9:45 am Market recovers: The market has recovered as the Nifty jumped above 7900. The 50-share index is up 28.20 points at 7940.05. The Sensex is up 66.27 points o at 26534.63. About 990 shares have advanced, 912 shares declined, and 53 shares are unchanged.

Hindalco is up 3 percent, ONGC, Tata Steel, L&T and M&M are other gainers while Sun Pharma, HDFC, Hero, ITC and Dr Reddy's Labs are laggards.

09:35pm Market Expert
With three consecutive days of selling by FIIs, most experts as well as traders are wondering whether it will be a rough ride in the October series. Deven Choksey of KR Choksey Shares & Securities does not think so. He says fundamentals – market as well as on the macro front – continue to remain strong and chances are it will only improve further.

"Whenever the market runs ahead of time, it gets into a consolidation mood, I think that is what the market is doing right now," he told CNBC-TV18.

Choksey advises investors to use every dip as a buying opportunity. He believes investors should look at all those companies where the fall is maximum.

Despite the recent coal mining verdict and the fallout of the same, he says it is perhaps time to look into the fundamentals of the companies that this verdict will affect the most, it can also be a buying opportunity.

09:15am Market Check
Equity benchmarks started of October series on a weak note with the Sensex falling 73.61 points to 26394.75 and the Nifty declining 17 points to 7894.85 following weakness in global peers.

About 308 shares have advanced, 506 shares declined, and 24 shares are unchanged.

Coal India, Sesa Sterlite, Tata Motors, Axis Bank, Hero Motocorp, Jindal Steel, Asian Paints and PNB dropped 1-3 percent while Cipla, Infosys, Wipro, ONGC, Bajaj Auto, Lupin, Tech Mahindra, DLF and IndusInd Bank gained 0.3-1 percent.

Asian markets were trading lower with the Nikkei falling 1 percent. In the US, stocks declined, with the benchmark indexes recording their worst session since July 31, as Apple tumbled on glitches tied to its new smartphone and as investors considered a proposal in Russia that would let its courts seize foreign assets.

And on the US economic data front, orders for long-lasting goods fell 18.2 percent in August, while applications for unemployment benefits rose by 12,000 to a seasonally adjusted 293,000 last week, less than the 300,000 estimate.

Moreover, in Europe, shares closed sharply lower, as the head of the Bank of England warned that the time for raising interest rates from record lows was nearing.

In the currency space, the euro hit a 22-month low against the dollar on Thursday on the prospect of diverging monetary policy between the Federal Reserve and the European Central Bank as rate differentials swing decisively in the greenback's favour. The dollar index hit a new four-year high.

In commodities, Brent crude prices was hovering around 97 dollars per barrel as abundant supply and a strong USD largely outweighed worries conflict in the west Asia disrupting output.