Sensex, Nifty end at new closing high; metals & IT surge
24 November 2014
Stirred up by positive global news, Indian market maintained strong upmove throughout the day before ending at record high levels. The Sensex ended up 164.91 points or 0.6 percent at 28499.54 after hitting intra-day record high of 28542. The Nifty closed up 52.80 points or 0.6 percent at 8530.15, after touching intra-day record high of 8534.65.
About 1346 shares have advanced, 1734 shares declined, and 116 shares are unchanged.
China's unexpected rate cut by the central bank, first time in two years, boosted metal stocks as it currently consumes around half of the world's metals. What added to the euphoria is hope of a stimulus as European Central Bank President Mario Draghi threw the door wide open for more drastic measures to prevent the euro zone from sliding into deflation, promising to use whatever means.
Experts are still betting on India's outperformance. Manishi Raychaudhuri, Asia Pacific Equity Strategist at BNP Paribas retains his overweight stance on Indian equities. However, he warns that India may consolidate at current levels having outperformed so sharply as valuations are becoming worrisome.
Moreover, given the current scenario, the Reserve Bank of India may not cut rates on December 2, he adds. Although India remains one of the best games in town amongst emerging markets (EMs), incremental outflows can be seen flowing into north Asia, specifically China and Korea in near-term, he says in an interview to CNBC-TV18.
Metals hogged limelight today with big gainers like Hindalco, Tata Steel and Sesa Sterlite. Banks, IT and capital goods also saw good buying interest.
Both ICICI Bank and Infosys contributed over 60 percent to Nifty gain. Lupin, Bajaj Auto, Infosys, ICICI Bank, HDFC Bank also hit record highs in today's trade.
Tata Power, another major gainer in the Sensex, was up 4.3 percent.
Oil and gas stocks were major laggards today with Reliance and ONGC falling percent. Brent crude oil stabilised around USD 80 a barrel as world powers met in Vienna for the final day of talks on Iran's nuclear programme ahead of a key meeting of producer group OPEC to discuss production.
The Organization of the Petroleum Exporting Countries (OPEC) is considering how to respond to a collapse in oil prices and may decide to cut its output target when it meets on November 27. Fund managers say oil prices could plunge to USD 60 a barrel if the cartel fails to make significant cuts to reduce an oversupply on world markets.
Cipla, Sun Pharma, HUL and Bharti Airtel were among laggards in the Sensex.
03:30 pm Market closing: Buoyed by strong global cues both from China and ECB, the market made record highs and finally ended at a new closing high. The Sensex was up 164.91 points at 28499.54 and the Nifty was up 52.80 points at 8530.15. About 1346 shares advanced, 1734 shares declined and 116 shares are unchanged.
Metals gained the most with Tata Steel and Hindalo as lead gainers. ICICI Bank, Infosys contributed over 60 percent to the Nifty gain. Infosys, ICICI Bank, HDFC Bank, Lupin and Bajaj Auto hit record highs while oil stocks were laggards throughout the day.
3:00 pm Fresh funds? SpiceJet is in "exploratory and preliminary stage" talks with investors about raising fresh capital, the budget airline said in a regulatory statement.
The airline said a few parties had approached it about making an investment but because the talks were at an early stage it would be improper to comment on the specifics of any possible stake sale.
SpiceJet, which has lost money for five consecutive quarters, has been trying to raise new money for much of this year. The airline said in May it was in "advanced" talks for a capital infusion but no deal materialised.
2:30 pm Launch: Dr Reddy's Laboratories has launched Docetaxel injection USP 20 mg/mL and 80 mg/4 mL, a generic version of Taxotere (docetaxel injection) in the US market.
Dr Reddy's Abbreviated New Drug Application (ANDA) is approved by the United States Food & Drug Administration (USFDA), DRL said in a statement today. Taxotere (docetaxel) is a cancer medication that interferes with the growth and spread of cancer cells in the body.
Its brand and generic versions have US sales of approximately USD 218 million MAT for the most recent 12 months ending in September, the drug maker said quoting IMS Health data.
The street is bustling with active buying. The Sensex is up 179.87 points or 0.6 percent at 28514.50 and the Nifty is up 49.10 points or 0.6 percent at 8526.45. About 1402 shares have advanced, 1508 shares declined, and 130 shares are unchanged.
Banks, infra, IT and realty stocks are lending strong support to the key benchmark indices. Hindalco, Tata Steel, Tata Power, Infosys and ICICI Bank are major gainers in the Sensex. Among the losers are Reliance, ONGC, Cipla, Tata Motors and ITC.
Asian markets surge spurred on by the surprise rate cuts by the People's Bank of China. The Chinese central bank cut its benchmark interest rate for the first time in over two years to support its cooling economy.
1:50 pm Goldman Sachs on Asia: Asia share markets are headed for a slightly better year after 2014's low returns, but bigger gains will come from seeking reform beneficiaries in China and India, Goldman Sachs said. "2014 has been another year with an unexciting headline return," with the MSCI Asia Pacific ex-Japan index (MXAPJ) up only around 3 percent after a selloff in September wiped out earlier gains, Goldman said in a report Monday. But after the recent "concentrated" outflows, overall positioning in the region appears light, it said.
"Performance pressure so far and a desire to amplify returns could drive broader re-risking from active funds," Goldman said.
1:30 pm Buzzing: Shares of VA Tech Wabag jumped 3 percent intraday after it secured a deal in Philippines. The water and waste treatment company bagged an order from Maynilad Water Services, Philippines for construction of 20 MLD Sewage Treatment Plant (STP) at Tunasan.
"The project is funded by World Bank and the order value is approximately Rs 100 crore. After designing and building the plant, Wabag will operate and maintain the plant for a period of one year as part of the contract," the company said in a statement.
Wabag has already executed three projects in Phillipines and is currently executing two large projects at Illugin and Putatan.
The market has picked up pace once again. The Sensex is up 138.96 points at 28473.59, and the Nifty up 38.25 points at 8515.60. About 1360 shares have advanced, 1429 shares declined, and 111 shares are unchanged.
Hindalco, Tata Steel, Tata Power, Infosys and ICICI Bank are top gainers in the Sensex. Among the losers are Reliance, ONGC, M&M, Tata Motors and HUL.
Brent crude futures rose above USD 80.50 a barrel ahead of a meeting of the producer group OPEC at which an output cut will be discussed, while China's move to lower interest rates late last week also underpinned prices.
Asian markets rallied with shares in Shanghai hitting three-year highs as the prospect of further policy stimulus in China and Europe whetted risk appetites globally while sending the euro skidding. Oil markets, however, remained more hesitant. Brent saw only a slight rise, with analysts saying supply and demand fundamentals were preventing further rallies.
12:50 pm Global business confidence slump: Worldwide business confidence slumped to a five-year low, with company hiring and investment intentions at or near their weakest levels in the post-global financial crisis era, according to a new survey.
"Clouds are gathering over the global economic outlook, presenting the darkest picture seen since the global financial crisis," said Chris Williamson, chief economist at Markit.
The number of companies expecting their business activity to be higher in a years' time exceeded those expecting a decline by just 28 percent. This was below the net balance of 39 percent recorded in the summer, the Markit Global Business Outlook Survey showed.
The tri-annual survey, published, looked at expectations for the year ahead across 6,100 manufacturing and services companies worldwide.
12:30 pm Interview: The Narendra Modi-led government is taking quick steps to give necessary boost to the Railways and has recently released rail wagon orders. Speaking to CNBC-TV18, AK Vijay, CFO, Texmaco says the company expects business to improve in Q3 and Q4.
The wagon maker company is working at 60-70 percent capacity and expects improvement in demand from American market going ahead.
The government had allocated 2,400 wagons to the company in April 2014, of which close to 1,200 wagons were released the same month. The remaining 50 percent wagons will be issued now and the process will be completed by April 2015, adds Vijay.
The market is slightly losing its morning gains. The Sensex is up 91.82 points at 28426.45 the Nifty is up 26.60 points at 8503.95. About 1303 shares have advanced, 1354 shares declined, and 92 shares are unchanged.
Oil stocks are weak dragged majorly by Reliance and ONGC. HDFC, HUL and M&M are among the laggards. Metal stocks are still seeing good buying interest with gainers like Hindalco and Tata Steel. Infosys, Tata Power and BHEL are up 2-3 percent.
Oil prices could plunge to USD 60 a barrel if OPEC does not agree a significant output cut when it meets in Vienna this week, market players say. Brent crude futures have fallen 34 percent since June to touch a four-year low of USD 76.76 a barrel on November 14, and could tumble further if OPEC does not agree to cut at least 1 million barrels per day (bpd), commodity fund managers say.
11:55 am View on China rate cut: Shaun Rein, China Mkt Research Group, in an interview to CNBC-TV18, said rate cut by the People's Bank of Chian doesn't necessarily mean there will be a massive quantitative easing but could be targeted easing.
It is possible that there could be reserve ratio cut in the next quarter, he adds.
According to him rate cut in China could mean other regions like EU might too reduce some rates which might lead to fund flows into equities, so one could see strength into Asian equities like in Hang Seng or Hong Kong over the next day or two but the government may not do too much because the credit problems still persists.
The Chinese government is in a difficult position right not to get its economy moving which is why it has cut rates but at the same time the unemployment numbers are still strong, salaries continue to go up and there are still very real weakness in non-performing loans.
11:30 am Market opinion: Manish Gunwani, Senior Fund Manager, ICICI Prudential AMC is positive on the market and believes that over next three 3 years, Indian equities will be the best asset class to own.
peaking about other assets, he said that the super cycle in commodities is over. On the fixed-income side, he is bullish on long-term duration bonds. On a sectoral basis, he feels that some private banks are still trading cheap relative to historic valuations. He is also upbeat on public sector lenders and finds them attractive at current levels.
Celebration continues on Dalal Street after the market scaled new high in opening session. The Sensex is up 108.30 points at 28442.93 and the Nifty gains 29 points at 8506.35. About 1294 shares have advanced, 1229 shares declined, and 108 shares are unchanged.
Hindalco, Infosys, Tata Steel, BHEL and Sesa Sterlite are top gainers in the Sensex. Reliance loses 1 percent. HDFC, HUL, M&M and Cipla are among the losers in the Sensex.
Chinese stock rose, with a key index hitting a three-year high, while bond yields fell, as markets cheered a surprise rate cut that investors hope may signal the start of a fresh cycle of aggressive policies to boost flagging growth.
The People's Bank of China bank cut one-year benchmark lending rates by 40 basis points to 5.6 percent late of Friday, taking by surprise market participants who had predicted more covert policy easing measures such as liquidity injections.
10:30 am Winter session: The winter session of Parliament is scheduled to begin today. The government will be keen on getting parliamentary approval for the recent ordinances that were promulgated, especially the coal mines special provisions ordinance.
The new law will set in motion the process of auctioning coal blocks in line with the Supreme Court order. The Insurance Amendment Bill and the GST Act are also a part of government economic reforms agenda.
The Insurance Bill was referred to the select committee in the last session. The Trinamool Congress is likely to oppose it this time too. The party also intends to take on the Centre on the issue of black money.
The market is holding strong with support from banks, metals and IT stocks. The Nifty is still holding up the 8500-mark. The 50-share index is up 28.70 points at 8506.05. The Sensex is up 109.36 points at 28443.99. About 1216 shares have advanced, 816 shares declined, and 75 shares are unchanged.
Hindalco, Sesa Strelite and Tata Steel are up around 3 percent each. ICICI Bank and Infosys are other gainers in the Sensex. Among the losers are HUL, Cipla, M&M, Reliance and Bharti.
Oil prices were mixed in ahead of a crucial meeting of the OPEC cartel later in the week that will discuss whether to trim output. The Organisation of the Petroleum Exporting Countries will hold one of its toughest and most significant meetings in recent years on Thursday, with members under pressure to address falling prices, which have sunk 30 percent since June. Investors were also waiting for third-quarter gross domestic product data from the United States and European powerhouse Germany scheduled Tuesday to gauge oil demand.
9:50 am Market outlook: Manishi Raychaudhuri, Asia Pacific Equity Strategist at BNP Paribas retains his overweight stance on Indian equities. Although India remains one of the best games in town amongst emerging markets (EMs), incremental outflows can be seen flowing into north Asia, specifically China and Korea in near-term, he says in an interview to CNBC-TV18.
According to him, as valuations are becoming worrisome, India may consolidate at current levels having outperformed so sharply. Moreover, given the current scenario, the Reserve Bank of India may not cut rates on December 2, he adds.
From the private banking space, he remains most upbeat on HDFC Bank and ICICI Bank. On the flipside, he advises investors to avoid PSU banks barring State Bank of India and Bank of Baroda.
9:30 am Eye on China: China's surprise interest rate cut on Friday spurred Asian indices on Monday, mirroring a positive session on Wall Street.
In an unexpected move after the Shanghai Composite index closed for the week, the People's Bank of China cut its benchmark interest rate for the first time in over two years to support its cooling economy. The one-year benchmark lending rate was trimmed by 40 basis points to 5.6 percent, while one-year benchmark deposit rates were lowered by 25 basis points; the move is effective from November 22.
The market opens at a record high once again. The Nifty hits 8500 in opening for first time. The 50-share index is at 8510, up 31.70 points while the Sensex is at 28461.77, up 120.46 pts.
Metal stocks are up with Sesa, Hindalco and Tata Steel as major gainers. Infosys and Tata Motors are other gainers. Bajaj Auto, ITC, NTPC, HUL and Dr Reddy's Labs are among the losers.
The Indian rupee opened higher by 7 paise at 61.69 per dollar on Monday versus 61.76 Friday.
The euro near a two-year trough against the dollar and was broadly weaker on prospects of more easing from the European Central Bank.
Agam Gupta of Standard Chartered Bank said, "We expect the rupee to trade in a range of 61.65-61.95/dollar. Nationalised Bank demand should come in at 61.65-61.70/dollar and any upticks to 61.90/dollar will be used by exporters to sell. FII and FDI flows continue to come into the country and hence there could be some inflows from there too."
In the US, markets surged to new all-time highs, thanks to a surprise interest rate cut from the People's Bank of China, the first such move in two years, to spruce up growth. Global markets too remained buoyant post the move.
Brent crude rose to USD 80 per barrel after a rally spurred by China's first interest rate cut in more than two years. Investors are also eyeing this week's meeting of the organization of the petroleum exporting countries at which the group would decide whether to cut output to trim global supply and boost oil prices that have fallen by 30 percent since June.
From precious metals space, gold rose above USD 1200 an ounce after China's central bank cut interest rates.