Fed minutes lift Sensex 390 points; BHEL up 8%, Infy Q2 eyed

Bulls finally found their feet on Dalal Street on Thursday. Equity benchmarks snapped three-day losing streak due to broadbased rally triggered by Fed chair Janet Yellen and the US Federal Reserve.

Benchmarks recouped all its losses seen in previous three sessions. The 30-share BSE Sensex surged 390.49 points or 1.49 percent to close at 26637.28 and the 50-share Nifty climbed 117.85 points or 1.50 percent to 7960.55.

The broader markets too participated in the rally with the BSE Midcap and Smallcap indices rising 1.8 percent and 1.6 percent, respectively.

Dovish statements from the US Federal Reserve (on Wednesday) triggered a relief rally not only in India but also across the globe. The latest minutes of a meeting (held on September 16-17) of the central bank hinted that rate hikes in the US will take some time. Asian markets (barring Nikkei) gained 0.3-1.2 percent following rally in US markets while European markets were marginally in green after strong opening (at 16:00 hours IST).

Back home, Madhya Pradesh today kicked off its fourth edition of the global investors' summit, to attract billions of dollars in big-ticket projects from global investors and industry heavyweights. The three-day long event was inaugurated by Prime Minister Narendra Modi, who appealed to foreign investors to invest in Madhya Pradesh through the 'Make in India' campaign. He added that foreign investments worth USD 100 billion are knocking India's doors and it is up to the states to lap up as much as they can.

Meanwhile, Facebook's co-founder and CEO Mark Zuckerberg came to India to meet the Prime Minister. He said Facebook is ready to help the government connect nearly 600 villages in India which do not have internet access.

Stock in action
It was a broadbased rally as all sectoral indices closed in green. BSE Capital Goods, Realty, Bank, Power, Metal, Oil & Gas, Healthcare and Auto indices surged 1-3 percent.

State-run power equipment maker BHEL was the top gainer throughout the session, up 8.4 percent on bagging EPC order worth Rs 7,800 crore for 2x660 MW rating supercritical power project from Tamil Nadu Generation & Distribution Corporation. Its rival engineering and construction major Larsen and Toubro was up 2.6 percent.

Aluminium major Hindalco Industries rallied 6 percent after strong earnings reported by Alcoa in September quarter.

ICICI Bank, HDFC, HDFC Bank, State Bank of India, Reliance Industries, Tata Motors, Axis Bank and Tata Steel were other prominent gainers, up 2-3 percent. Drug maker Cipla was up 1 percent on collaboration with Teva Pharma for South African market.

It was a volatile session for Infosys ahead of its second quarter (July-September) earnings that will be announced on Friday morning. Analysts expect 3 percent growth in dollar revenues and do not expect any change in FY15 dollar revenue guidance. CEO Vishal Sikka's strategy will be closely watched. Anything above 3.5 percent growth in dollar revenue in Q2 may spark rally in stock. The scrip closed marginally lower today.

03:30pm Market Closing
Equity benchmarks staged smart recovery on Thursday after seeing a fall in previous three sessions. The Sensex climbed 390.49 points or 1.49 percent to 26637.28 and the Nifty rose 117.85 points or 1.50 percent to 7960.55 after the dovish cues from the Fed.

About 2022 shares have advanced, 926 shares declined, and 107 shares are unchanged.

BHEL, Hindalco Industries, SBI, Larsen and Toubro, ICICI Bank, Zee Entertainment, Ambuja Cements and ACC topped the buying list, up 2.4-8.4 percent while Wipro, NTPC, M&M, ITC, NMDC and BPCL were down 0.3-1 percent. Tech Mahindra lost 2.49 percent.

03:10pm Cox & Kings in News
Cox & Kings said the board of directors has approved raising of funds for an amount not exceeding Rs 1,200 crore through issuance of securities including equity shares or equity linked securities, including through a qualified institutions placement and/or issuance of equity shares through convertible bonds, depository receipts and/or any other instrument convertible or exchangeable into equity shares, and/or other securities with or without warrants, to eligible investors.

03:00pm Market Check
The Sensex climbed 408.69 points or 1.56 percent to 26655.48 and the Nifty rose 120.60 points or 1.54 percent to 7963.30.

About 2030 shares have advanced, 877 shares declined, and 113 shares are unchanged.

02:50pm Taneja Aerospace in Focus
Taneja Aerospace and Aviation (TAAL) said the board of directors today approved the scheme of arrangement between TAAL) and TAAL Enterprises (TEL, a wholly owned subsidiary of the company), where the charter business and investments in First Airways Inc. and TAAL Tech India Private Limited (subsidiaries of the company) would be demerged into TEL.

The appointed date of the scheme is October 01, 2014. The shareholding of TEL post demerger would be the same as TAAL.

Shareholders will get one share in TEL for every eight shares held in TAAL.

02:40pm Infosys Q2 expectations
India's second largest software services exporter Infosys will kick off second quarter (July-September) earnings season on Friday. While the operating numbers will be closely watched, of more interest to the market will be the strategy of newly appointed CEO Vishal Sikka.

According to the average of estimates collated by CNBC-TV18, profit after tax is expected to increase 3.43 percent sequentially to Rs 2,985 crore from Rs 2,886 crore.

Rupee revenue may grow 4.2 percent quarter-on-quarter to Rs 13,307 crore and dollar revenue is seen rising 2.9 percent to USD 2,195 million as against 2 percent growth in previous quarter.

02:20pm Global markets
World stock markets roared their approval of reassurances the US Federal Reserve will not rush into raising interest rates, with risk appetite flooding back into almost every asset class.

The dollar jolted lower, while oil and commodity prices rose. Bond yields in large parts of Europe, which have plunged during years of cheap funding from the Fed and the world's other major central banks, hit new record lows.

Minutes of the Fed's September 16-17 meeting published late on Wednesday showed officials were wary about the dual threats of a stronger dollar and recent wobbles in the world economy as they seek an eventual exit from record low rates.

There were big gains on Wall Street and for Asia stocks, and European shares duly followed suit as Britain's FTSE 100, Germany's DAX and France's CAC 40 rose 0.7, 1.2 and 0.8 percent respectively in early trading, reports Reuters.

02:00pm Market Check
Equity benchmarks maintained strong momentum with the Sensex rising 393.79 points or 1.50 percent to 26640.58 and the Nifty climbing 113.80 points or 1.45 percent to 7956.50 while the BSE Midcap and Smallcap indices jumped 1.8 percent and 1.6 percent, respectively.

About 1965 shares have advanced, 856 shares declined, and 103 shares are unchanged on the Bombay Stock Exchange.

Shares of ICICI Bank, HDFC, HDFC Bank, L&T, Reliance Industries, Axis Bank, Maruti Suzuki and Tata Power rallied 2-3 percent while PSU lender State Bank of India was up 3.5 percent.

Hindalco Industries surged over 5 percent, reacting to Alcoa's Q3 numbers which beat estimates while BHEL spike 8 percent after the company bagged an EPC order worth Rs 7,800 crore from Tamil Nadu Generation & Distribution Corporation.

However, ITC, Wipro and NTPC lost ground, down 0.3-1 percent.

In the midcap space, Amtek India, Monsanto India, United Bank, Den Networks and Federal Bank rose 7-15 percent whereas Trinity Trade, Mindtree, Pfizer, Risa International and Responsive Industries slipped 1-5 percent.

01:40pm Hindustan Zinc in news
The government today submitted before the Supreme Court that it is yet to get direction on Hindustan Zinc (HZL) divestment from the finance ministry as the Finance Minister was indisposed and not available for a discussion on the matter.

Further, the government has also clarified before the apex court that a final decision in this regard is unlikely to take place before 3-4 months.

Meanwhile the Supreme Court has also pulled up the CBI and asked the investigative agency to submit the statues update of the initial HZL divestment probe, which happened in 2002-03 under the earlier NDA regime.

The next hearing for the case is slated on October 14.

01:30pm FII View
Jyotivardhan Jaipuria, Bank of America Merrill Lynch says aggregate Sensex PAT is expected to show growth of 12 percent on a consolidated basis and 9.1 percent on standalone basis. There is also an expected deceleration in sales growth to 4.8 percent, he adds.

"However, good news is that forecast ex-energy PAT growth is strong at 16.4 percent. Secondly, EBITDA margin is expected to continue showing improvement. This is consistent with our view that earnings will recover gradually and show sharp growth from 2HFY16. Near-term, we continue to expect market to be range-bound with negative bias due to slower than expected reform pace," says Jaipuria.

01:00pm Market Check
The market extended northward journey in afternoon trade with the 30-share BSE Sensex rising 388.68 points or 1.48 percent at 26635.47 and the 50-share NSE Nifty hitting 7950 level, up 114.35 points or 1.46 percent at 7957.05 supported by banking and financials, oil and gas, and capital good stocks.

More than two shares advanced for every share declining on the Bombay Stock Exchange. Meanwhile, the rupee gained 47 paise to 60.92 a dollar compared to previous day's closing value.

Top lenders State Bank of India, ICICI Bank, HDFC Bank, and Axis Bank, and housing finance company HDFC gained 2.4-3 percent followed by capital goods majors L&T and BHEL with 2.4 percent and 5.5 percent upmove.

Aluminium major Hindalco Industries maintained its strong gains, up 5.5 percent after Alcoa's Q3CY14 earnings. Cipla gained over 2 percent on collaboration with Teva Pharma for South African market.

Among others, Tata Motors, ONGC, Reliance Industries, TCS, Sun Pharma, Bharti Airtel, Maruti Suzuki, Tata Steel, Sesa Sterlite, Tata Power and Gail India rallied 1-2 percent. However, Coal India, NTPC, Wipro and Infosys were only losers.

SBI, Infosys, Force Motors, Hinduja Global, Dr Reddy's Labs, ICICI Bank, Hindalco Industries and Jaiprakash Associates were most active shares on exchanges.

12:50pm 8K Miles Software Services at record high
Shares of 8K Miles Software Services have been locked at 5 percent upper circuit for the second consecutive session on Thursday. The stock touched an all-time high of Rs 570.60 after it reported strong earnings in the quarter ended September 2014.

The cloud-based solutions provider has posted a profit after tax of Rs 4.14 crore, up 31.43 crore compared to Rs 3.15 crore in previous quarter. Revenue during the same period climbed 29 percent to Rs 27.08 crore from Rs 20.99 crore.

Operating profit of the company jumped 31 percent sequentially to Rs 8.45 crore and margin expanded by 50 basis points to 31.2 percent from 30.7 percent.

12:30pm Europe Check
European markets like France's CAC and Britain's FTSE gained 1 percent post the release of minutes from the latest Federal Reserve Open Market Committee (FOMC).

Minutes from the Federal Reserve's September 16-17 policy meeting released on Wednesday confirmed the central bank's dovish tone. They showed a heated debate on forward guidance and some members argued that current language painted the wrong picture on the timing of rate hikes and pushed for rate hikes to be more dependent on economic data. The report also showed that the Federal Reserve staff cut their growth outlook due to the higher dollar, as a number of committee participants had concerns with global weakness, reports CNBC.

12:15pm Infosys to deliver Q2 earnings on Friday
With the IT major Infosys set to declare its second quarterly numbers tomorrow, Sagar Rastogi, Associate VP, Ambit Capital has a sell on the stock with a price target of Rs 3650.

He does not see the revenue trajectory for the company being anywhere close to its peers and expects Infosys to deliver around 3 percent revenue growth in dollar terms quarter on quarter (Q-o-Q) but sees no change in their FY15 dollar guidance of 7-9 percent.

However, he is positive on the overall Indian IT services space sector on back of demand environment and Europe's openness for offshore businesses and tailwinds of new service lines such as digital contributing to overall growth.

Ratogi is in the camp that believes comments made by the new CEO and MD, Dr Vishal Sikka will be watched closely but are not likely to significantly swing the stock per se.

In case Infosys reports dollar revenue growth around 4 percent then street may react positively to the stock, he adds.

12:00pm Market Check
The market sees a relief rally after dovish cues from the Fed. The Sensex rallied 257.99 points or 0.98 percent to 26504.78, and the Nifty jumped 76.85 points or 0.98 percent to 7919.55 led by banking, real estate, oil & gas, capital goods and pharma stocks. The BSE Midcap and Smallcap too gained in-line with frontliners, up 1.2 percent each.

About 1790 shares have advanced, 738 shares declined, and 86 shares are unchanged.
 
Hindalco Industries surged nearly 5 percent, reacting to Alcoa's Q3 numbers which beat estimates while BHEL shot up 4.75 percent after the company won an EPC order worth Rs 7,800 crore. Cipla too is on the gainers list, up 2 percent due to its tie up with Teva for South African markets.

Polaris Financial crashed 16 percent as the company has demerged services & products business and today is the ex-date for demerger of the products business. Analysts estimate fair value of services at Rs 190-200/share.

Indian bond prices fell over 50 paise and yields shot up nearly 7 basis points after RBI announced it will sell bonds through its open market operations. The rupee appreciated by 44 paise to 60.94 on global dollar weakness after the FOMC minutes expressed worries over a strong dollar.

11:50am Auto space growth in FY15
Prasad Koparkar, Senior Director at CRISIL Research is confident of the automotive space seeing a 15 percent growth in FY15. On the back of passenger vehicles and heavy commercial vehicles showing signs of revival, he expects auto and auto components to perform well hereon.

CRISIL Research expects India Inc to report a revenue growth of 9 to 10 percent Year-on-Year in the September quarter, against 13 percent growth reported in the June quarter.

11:35am Hindalco keeps top position in buy list
Investors lapped up huge shares of Hindalco Industries on hopes of strong numbers in second quarter after its global rival Alcoa posted better-than-expected earnings in September quarter. The stock gained as much as 6 percent intraday.

Pittsburgh-based Alcoa (Aluminum Company of America), a global leader in lightweight metals technology, engineering and manufacturing, has reported a revenue of USD 6.2 billion, up 7 percent sequentially and up 8 percent from prior year period. Analysts had expected revenue of around USD 5.9 billion.

Net income of the company increased 71 percent sequentially and 208 percent year-on-year to USD 370 million or USD 0.31 per share, led by strong productivity and pricing.

11:20am GVK in News
GVK and Australian billionaire Gina Rinehart have secured an environmental permit to build their Alpha Coal project in Australia, moving it a step closer to signing off on a long-delayed USD 10 billion mine, rail and port project.

The GVK Hancock joint venture still needs to finalise a plan with coal rail operator Aurizon Holdings , overcome legal challenges to the project, and sign coal sales agreements before lining up financing for the huge project.

"Now that we have our Environmental Authority for our Alpha Coal Project our key focus is to continue advancing the project to a point where construction can commence," GVK Hancock said in a statement.

The Alpha mine is 79 percent owned by GVK and 21 percent owned by Rinehart's Hancock Prospecting, reports Reuters.

11:00am Market Check
Bull remained in full control of Dalal Street. The Sensex shot up 306.79 points or 1.17 percent to 26553.58 and the Nifty rose 89.95 points or 1.15 percent to 7932.65 while the BSE Midcap and Smallcap indices gained 1.4 percent and 1.5 percent, respectively.

About 1795 shares have advanced, 522 shares declined, and 64 shares are unchanged on the Bombay Stock Exchange.

Shares of ICICI Bank, HDFC, SBI, L&T, Reliance Industries, Tata Motors, Sun Pharma, ONGC, Hindalco, Axis Bank, Bharti Airtel, Cipla, BHEL, Dr Reddy's Labs, Sesa Sterlite and Maruti Suzuki gained 1-5 percent while ITC and Mahindra & Mahindra were only losers.

United Bank of India gained 10 percent as media report suggested that financial services secretary says the bank is likely candidate for merger this fiscal.

Polaris Financial Technology tanked 17 percent on demerger of Intellect Design Arena. The company has fixed the record date as October 10, 2014 for the purpose of determining the list of shareholders who are entitled to receive the shares in Intellect Design Arena, the resulting company after the demerger.

10:59am Interview
Umesh Revankar, Managing Director at Shriram Transport Finance Company expects the Reserve Bank to restart NBFC licensing soon. Speaking to CNBC-TV18, he said the company has made strong representation to the RBI with respect to NPL recognition norm.

Speaking about the transport sector, Revankar said bulk goods transport is still subduedl but heavy commercial vehicle (HCV) sales have improved on a month-on-month basis.

10:50am Cipla in News
Shares of Cipla gained over 2 percent after its subsidiary Medpro Pharmaceutica entered into collaboration with Teva Pharmaceuticals for South African market.

Medpro Pharmaceutica is a subsidiary company of Cipla Medpro, the third largest pharmaceutical company in South Africa while Teva is the largest generic pharmaceutical manufacturer in the world.

The collaboration is a sales and distribution arrangement whereby Cipla Medpro will exclusively market Teva's broad pharmaceutical product portfolio in South Africa, says the company in its filing, adding the collaboration will focus on oncology, central nervous system, women's health, cardiovascular, ophthalmology and other specialty products.

10:35am Market Expert
Sanjeev Prasad, senior executive director & co-head, Kotak Institutional Equities expects the government to focus on domestic issues like GST and gas pricing hike once state polls are out of the way.

Sharing outlook on the Indian equity market with CNBC-TV18, he says the market's medium-term moves remain intact and one can expect 16 percent year-on-year growth in Sensex earnings, excluding the energy pack.

Second quarter earnings season kicks off from October 10 with IT giant  Infosys announcing its numbers. He feels Infosys is unlikely to change guidance and would post 2.7 percent growth on a quart-on-quarter basis.

10:20am Brent Crude Update
Brent crude futures held steady above USD 91 a barrel, after rebounding from a 27-month low hit in the previous session as the US dollar weakened on the possibility the Federal Reserve could hold off raising interest rates.

Expectations that oil demand could increase towards the end of this month - even though US crude stocks increased more than expected last week - also helped to support prices.

Minutes of the US Fed's last policy meeting released on Wednesday showed signs that concerns about the impact of a strengthening greenback on the economy may delay any decision on interest rate changes, reports Reuters.

10:00am Market Check
The market remained strong in morning trade with the Sensex surging 281.73 points or 1.07 percent to 26528.52 and the Nifty climbing 84.10 points or 1.07 percent to 7926.80 supported by broadbased buying.

Market expert Ambareesh Baliga sees 7,800-7,750 as good support level for the Nifty. In an interview with CNBC-TV18, he said Nifty is unlikely to go much beyond 8,000 levels.

He remains positive on cyclicals and expects them to become more attractive post any market correction. According to Baliga, the next leg of market rally will be led by cyclicals.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.4 percent each. Advancing shares outnumbered declining ones by a ratio of 1544 to 380 on the Bombay Stock Exchange.

The BSE Capital Goods, Realty, Metal, Banks, Healthcare, Power and Oil & Gas indices gained 1-1.7 percent.
 
Hindalco and BHEL kept their top positions in the buying list, up 4.8 percent and 3.5 percent, respectively. Dr Reddy's Labs, Cipla, HDFC, Bank of Baroda, Ambuja Cements and PNB surged 2-2.6 percent. However, NTPC and Bajaj Auto were only losers in the Sensex 30 stocks.

09:59am Telecom Commission meet
Telecom Commission is likely to meet on October 15 and discuss issues pertaining to the upcoming spectrum auction and full mobile number portability.

"The Telecom Commission will meet on October 15. The agenda has not been finalised yet but issues such as full MNP, NIA for the auctioneer and telecom connectivity to Andaman and Nicobar are likely to be taken up," a source in Department of Telecom said.

Telecom regulator TRAI has already given its final view on issues that were raised with respect to full MNP, a service which will allow mobile subscribers to change their operator in any part of the country while retaining their number. At present, a subscriber can avail such facility within same telecom service circle.

The working group at DoT on spectrum auction is also likely to place its study before Telecom Commission which comprises members from the DoT, Department of Electronics and IT, Planning Commission, Finance Ministry and Department of Industrial Policy and Promotion.

TRAI has given its recommendation with respect to auction of CDMA spectrum (800 Mhz band) and is working on recommendation for radiowaves in 900 Mhz and 1800 Mhz band
which at present are used for GSM services by telecom operators like Airtel , Vodafone, Idea Cellular , Videocon , reports PTI.

09:40am FII View
Jyotivardhan Jaipuria, Bank of America Merrill Lynch says aggregate Sensex PAT is expected to show growth of 12 percent on a consolidated basis and 9.1 percent on standalone basis. There is also an expected deceleration in sales growth to 4.8 percent, he adds.

"However, good news is that forecast ex-energy PAT growth is strong at 16.4 percent. Secondly, EBITDA margin is expected to continue showing improvement. This is consistent with our view that earnings will recover gradually and show sharp growth from 2HFY16. Near-term, we continue to expect market to be range-bound with negative bias due to slower than expected reform pace," says Jaipuria.

09:15am Market Check
Equity benchmarks rebounded in early trade on Thursday with the Sensex rising 294.82 points or 1.12 percent at 26541.61. The Nifty reclaimed 7900, up 84.50 points or 1.08 percent at 7927.20 post positive US cues.

The broader markets too saw buying interest with the BSE Midcap and Smallcap indices gaining 1 percent each. About five shares advanced for every share declining on the Bombay Stock Exchange. 

Hindalco topped the buying list, up 4 percent post Alcoa earnings. BHEL surged 3.5 percent on getting Rs 7800 crore EPC order from Tamil Nadu Generation & Distribution Corporation.

Dr Reddys Labs, ICICI Bank, SBI and DLF were other gainers, up 1.5-2 percent.

The Indian rupee gained in early trade. It has opened higher by 27 paise at 61.13 per dollar against previous close 61.40.

Mohan Shenoi of Kotak Mahindra Bank said, "Dollar gave back its gains due to reference to dollar strength and its impact on inflation in the FOMC minutes released overnight. This is expected to strengthen rupee today. USD-INR is expected to trade today in a range of 61.10-61.45/dollar."

On the global front, Asian equity markets rose after US indices posted their biggest one-day gain of 2014. Hang Seng, Nikkei, Straits Times and Taiwan Weighted gained 0.2-0.8 percent while Shanghai and Kospi fell 0.4-0.6 percent.

In the US, stocks ended about 2 percent higher as markets extended gains on the FOMC minutes and recovered from Tuesday's selloff, closing 274.8 points higher; the Dow Jones industrial average had its best day since December 18, 2013. The S&P 500 and the Nasdaq had their best day since nearly a year ago on October 10, 2013.

And in Europe, shares closed mostly lower, as fears over global growth and the Ebola virus spooked investors. Peripheral markets like Russia, Portugal and Irish markets were all under pressure and ended with cuts of 1.5 percent to 2 percent.

In the currency space, dollar slipped to near 2-week lows against the euro after minutes of the Federal Reserve policy meet suggested the Central Bank could take its time in raising interest rates.

In commodities, Brent crude held on the USD 91 level as global growth forecasts have raised new concerns about oil demand. And that too, at a time when US crude inventory levels continue to rise.