Nifty closes above 8400 amid M&A buzz
20 November 2014
3:30 pm: Equities held on to their late gains, with both the Sensex and Nifty closing above key 28,000 and 8,400 marks.
At close, the Nifty rose 0.22 percent, or 19 points, to 8,401 while the Sensex gained 0.12 percent, or 34 points, to 28,067.
Early in the day, high beta shares edged lower, but several sectors such as banks and oil & gas staged a smart recovery to close in the green. Metals and capital goods, though, closed 0.8 percent lower.
But the best performers of the day were IT and pharma, both helped by a depreciation in the rupee.
Cipla jumped 3.2 percent after announcing it had tied up with Serum Institute of India to launch vaccines in Europe.
The IT pack got a further boost with Tech Mahindra rallying about 3 percent, amid speculation it would announce an acquisition at a press conference it has scheduled at 4 pm today.
While Tech Mah only said it would make a ''strategic announcement'', traders zeroed in on MindTree (up 5.5 percent) and Geometric (up 9.5 percent) as possible takeover candidates.
Early on, some more M&A buzz doing the rounds was in the form of speculation Kotak Mahindra Bank (which climbed 7.4 percent) would take over ING Vysya Bank (up 7.8 percent).
Kotak issued a statement saying it had not taken any such decisions, a statement that not did not rule out the possibility of any such move either. A note by brokerage Nomura said ING's SME focused lending book would gel well with Kotak's largely retail-focused franchise.
In other sectors, sugar stocks witnessed profit booking after a much anticipated move by the government to incentivize exports did not come through. Leaders Balrampur, Bajaj Hindusthan and Shree Renuka sank 2.5 percent to 7.5 percent.
In individual stocks, Amtek Auto, Bosch and Strides Arcolabs surged 1.6 percent to 4.6 percent after being added to the NSE's futures and options segment.
Indiabulls Securities climbed 9.6 percent after a subsidiary announced a Rs 600-crore real estate acquisition.
3:00 pm: Indian shares staged a late recovery to trade flat after being marginally lower for most part of the day.
At the time of this writing, the Sensex was up 0.08 percent, or 22 points, to 28,050 while the Nifty was up 0.1 percent, or 9 points, to 8,391.
Traders said they will now see whether the Nifty will close above the 8,400 level where it has encountered technical resistance over the past few days.
Among sector movers, IT and pharma shares were broadly higher, benefiting from the depreciation in the Indian rupee beyond 62 to the US dollar.
While metals, capital goods, banks and auto were down between 0.4 percent and 0.8 percent.
In smaller sectors, sugar and logistics were down significantly following a sizzling rally over the past few weeks. While steel and textiles gained ground.
Among individual stocks, Kotak Mahindra Bank remains the biggest gainer from among the Nifty stocks, up 7.1 percent amid speculation it was going to take over ING Vysya Bank.
Jindal Steel & Power was down 3.7 percent a day after the government issued draft regulations for auction of coal blocks, in whose cancellation during the Coalgate scam, JPSL was seen as the worst hit.
2:30 pm: Meanwhile, markets have staged a late recovery with both the Nifty and Sensex crawling back, just about, to positive territory.
The Sensex is now up 0.06 percent to 28,049 while the Nifty has gained 0.08 percent to 8,389. Will the Nifty close above 8,400 today?
2:00 pm: Indian shares were trading lower Thursday, with mid and small cap stocks as well as high-beta shares such as capital goods reversing course and falling more than the frontline indexes, a move signaling risk aversion has set in in the markets.
At the time of this writing, the BSE Sensex was down 103 points, or 0.37 points, to 27,927 while the NSE Nifty fell 0.3 percent, or 24 points, to 8,358.
In sector movers, autos and capital goods, were down by more than 1 percent while mid and small cap shares were off 0.5 percent and 0.8 percent, respectively,
The downmove signaled the third day of consolidation this week after stocks inched to fresh all-time highs on Monday.
In sectoral moves, IT and pharma shares bucked the declining trend by climbing 0.5 percent each after the rupee fell to a nine-month low at 62.18 to the US dollar.
Sugar stocks crashed significantly with a 5 to 7.5 percent down move for leaders Shree Renuka, Balrampur and Bajaj Hindusthan after a much-awaited government to help exports did not appear to be materializing.
While in individual movers, Indiabulls Securities surged 7.4 percent after its subsidiaries acquired properties of India Land worth Rs 600 crore.
Kotak Mahindra Bank and ING Vysya both climbed 7.5 percent each amid speculation Kotak would acquire the latter, a move that analysts said would be highly synergistic.
1:30 pm: Pharmaceutical shares are trading higher, bucking the negative market trend. But which shares are likely to fare well going forward?
According to Nitin Agarwal of IDFC, these are Sun Pharma, Dr Reddy's Labs and Lupin. Read the interview to know why .
1:00 pm: Indian stocks traded marginally lower as stocks continued to consolidate for the third day running.
At the time of this writing, the Sensex was off 0.27 percent and Nifty 0.22 percent to 27,955 and 8,364, respectively.
A broad-based decline set in, with capital goods and utilities leading the fall with a more than 1 percent cut each, while oil & gas, telecom, metals and auto falling between 0.4 percent and 0.7 percent.
A fall in the rupee worsened with the local currency falling about 0.3 percent to 62.3 with dealers attributing the fall to banks buying dollars.
As a result, shares of IT and pharma companies, which derive a significant chunk of their revenues from abroad, edged higher with 0.4 percent and 0.8 percent gains, respectively.
Among the frontline indexes, JSPL was the worst hit with a 4.2 percent loss, while Kotak Mahindra Bank rose 6.8 percent amid speculation it was going to acquire ING Vysya Bank.
12:30 pm: Shares hold on to some of their losses, and are now trading with a 0.2 percent cut.
MNC stocks are trading lower, after witnessing a robust rally recently, after Sebi came out with fresh regulations aimed at easing de-listing norms. However, according to some, the new norms are unclear and may make the process even tougher. Read an interview on the subject with market expert Anil Jindal .
The regulator also tightened norms with respect to insider trading but moneycontrol.com editor Santosh Nair believes the new regulations may not be enough .
12:00 pm: Equities started drifting lower in afternoon trade, after moving around the flat line for early part of the day.
At the time of this writing, the Sensex came off 58 points to trade 27,978 while Nifty lost 11 points to reach 8,370. Midcaps, however, were resilient -- trading flat.
For the second day running, the high-beta trade, which has paid off well during the recent rally that saw benchmarks race to fresh highs, appeared to be unwinding.
Among decliners, capital goods was off 1.2 percent, while metals, oil & gas and utilities were down between 0.4 percent to 0.7 percent.
While 'defensives' IT and pharma were providing support the index with a 0.4 percent and 0.7 percent rise respectively - the former benefiting from a fall in the rupee below 62 per US dollar.
In news-driven movers, ING Vysya Bank surged 11.7 percent to hit a record high amid speculation it would be acquired by Kotak Mahindra Bank (up 6.2 percent). Brokerage Nomura said such the acquisition would make for a strategic fit for Kotak.
Indiabulls Securities was up 9.9 percent after its arm acquired India Land and Properties for a consideration of Rs 600 crore.
While stocks such as Amtek Auto, Bosch, Engineers India, Strides Arcolabs and Wockhardt gained between 0.7 percent and 4.9 percent after they were added to the futures and options segment by the NSE.
Sugar stocks declined sharply with leaders Balrampur, Shree Renuka and Bajaj Hindusthan losing between 2.2 percent and 4.1 percent, after a much anticipated government move to provide export sops did not come through.
11:30 am: The Nifty has strugged to decisively break out above 8,400. Here's what Dhirendra Tiwari of Antique Stock Broking thinks.
"There have been certain hurdles at several points in time during last about 18 months but given the fact that if you look at last three-four quarters of earnings performance of corporate India, it has been broadly in line or slightly better than expectations and with possible recovery in gross domestic product (GDP) next year, hopes of rate cut and policy reforms etc, I would still be positive on the market," he told CNBC-TV18 in an interview.
"I believe that this is a typical behaviour of markets towards the end of the year but I am sure come next January we will see new leg of market rally coming through," he added.
11:00 am: Frontline Indian equities traded flat in early trade with the benchmark indexes hardly moving on either side. Mid and small cap shares, however, witnessed some buying.
At the time of this writing, the Sensex was down 8 points to 28,021 while the Nifty was up 4 points to 8,387. The BSE mid and small cap indexes rose 0.2 percent and 0.15 percent, respectively.
Among the big gainers of the day were Kotak Mahindra Bank and ING Vysya Bank (up about 6 percent each, both making lifetime highs) amid speculation the former would acquire the latter.
Some metal shares (chiefly Hindalco which added 1.2 percent) were up after the government came out with draft rules to auction cancelled coal blocks.
While IT shares were broadly higher broadly higher after the rupee weakened the 62 to the US dollar mark .TCS, Infosys and Wipro climbed between 0.3 percent and 0.8 percent.
Consumer non-durable stocks saw some buying, with Nestle, Britannia and GSK Consumer up 0.4 percent to 1.1 percent amid some brokerage reports that said these stocks were poised to benefit from the global fall in commodity prices.
Sugar stocks saw profit booking after a much expected government move to incentivize exports did not come through.
Titan fell 1.9 percent amid speculation the government would take fresh steps to curb gold imports, a move that could make the yellow metal dearer and hurt its Tanishq franchise.
10:30 am: Shares continue to trade flat for the third day running with movements in individual stocks and sectors tugging at the indexes from either sides.
As of this writing, the Sensex had reclaimed the 28,000 mark it had gone below intra-day to trade at 28,040 (up 8 points) while the Nifty was 11 points shy of 8,400 (up 7 points).
To check out individual sector movements, click on the interactive Moneycontrol Map here .
10:00 am: Indian equities were trading with a mildly negative bias early Thursday with breadth favouring more declines than advances (942 to 859). Sectors that lent strength to the index were so-called defensives IT and consumers, while high-beta metals, banks, capital goods and oil & gas witnessed some selling.
At the time of this writing, the BSE Sensex was down 0.18 percent, or 53 points, to 27,980 while the Nifty was off 0.14 percent, or 12 points, to 8,370.
Among key movers, metal stocks moved lower after displaying strength early, as investors digested the impact of the coal auction draft rules that are expected to provide some clarity to supply of the fuel. Jindal Steel was down 1.2 percent while Hindalco gave up early gains.
Sugar stocks were significantly lower, following a recent rally, after the expected government move to provide export sops still has not come through. Balrampur Chini, Bajaj Hindusthan and Shree Renuka were down between 2.3 percent and 4.3 percent.
IT majors TCS, Infosys and Wipro were up between 0.1 percent and 0.5 percent, after the rupee sank below 62 to the dollar, a development that may benefit the services exporters.
While in individual stocks, ING Vysya Bank surged 6.2 percent, amid reports Kotak Mahindra Bank (up 6 percent) would acquire it, even as the latter issued a clarification to the exchanges saying no such decision had been taken.
A Nomura report said the acquisition would be beneficial for Kotak as the two banks have minimum overlap in terms of branches as well as business lines, and that ING's SME-focused business would complement Kotak's largely retail-focused franchise.
Dr Reddy's was up 0.3 percent, amid hopes the FDA's decision to revoke Ranbaxy's right to sell Nexium generic in the US, the second-largest selling drug in the world used to treat heartburn, would benefit the company. Ranbaxy was down 1.5 percent while its parent Sun Pharma was off 0.5 percent.
Stocks newly added to the futures and options segment by the exchanges witnessed buying interest. Amtek Auto, Bosch, Engineers India, Strides Arcolabs and Wockhardt were up between 0.8 percent and 3 percent.
9:15 am: Shares were flat to positive in opening trade, with Nifty testing the 8,400 level it lost yesterday.
At open, the Sensex was up 0.15 percent, or 37 points, to 28,077 while Nifty was up 0.15 percent, or 15 points, to 8,397.
In key movers, metal stocks were higher after the coal ministry issued draft guidelines for e-auction of de-allocated coal mines. Hindalco was up 1.55 percent while JSPL gained 0.2 percent.
ING Vysya Bank was up 6.4 percent in early trade amid reports it would be acquired by HDFC Bank (down 0.84 percent).
Several stocks that were added for derivatives trading such as Amtek Auto, Bosch, Engineers India, Strides Arcolabs and Wockhardt were up between 1.9 percent and 5.4 percent.
SBI was up 1.4 percent, after the stock went ex-split.
The rupee fell below 62 to the US dollar, hitting a 10-month low.