Nifty ends at 8235, Sensex up 366 points; Infosys gains 1%
08 January 2015
03:30 pm Market close
The market ended with some spectacular gains. The Sensex ended up 365.89 points or 1.4 percent at 27274.71 and the Nifty was up 132.50 points or 1.6 percent at 8234.60. About 2033 shares have advanced, 852 shares declined, and 411 shares were unchanged.
Infosys was up 1 percent ahead of December quarter results to be announced tomorrow.
03:10 pm Weak Q3
Realty firm Sobha Ltd's sales bookings declined by 15 per cent to Rs 427 crore during the third quarter of this fiscal due to slowdown in demand. Bangalore-based Sobha had achieved sales bookings of Rs 502.3 crore in the year-ago period. "Q3'15 was operationally a subdued quarter with the company achieving new sales of 6,61,451 sq ft valued at Rs 4.27 billion with an average realisation of Rs 6,456 per sq ft," Sobha said in its operational update.
In volume terms, Sobha sold 6.61 lakh sq ft of area during October-December against 7.4 lakh sq ft in the corresponding period of previous fiscal. Sales realisation also dropped to Rs 6,456 per sq ft from Rs 6,786 per sq ft during the period under review. "The real estate sector continues to be bogged down by inflexible interest rates, approval delays and slowing demand," Sobha said
02:55pm Market Update
The Sensex surged 407.59 points to 27316.41 and the Nifty gained 141 points at 8243.05. The BSE Midcap and Smallcap indices rallied 1.9 percent each.
02:45pm FII View
Herald Van Der Linde, Head-Equity Strategy, Asia-Pacific, HSBC understands the reason why Asian equities will see a decent growth this year. In an interview, he said the bull run will continue for a while more, although US rate hike fears will cause multiple scares through the course.
He says equity valuations and price earnings ratios are likely to remain static but corporate earnings growth can drive Asian equities higher by about 7 percent this year. "India can do even little bit higher than that, but I also think it will come with an increasing amount of volatility."
02:35pm Gravita India in demand
CARE Ratings has upgraded the bank loan rating of Gravita based on its improved scale of operations and continuous business performance. The rating agency CARE has upgraded Gravita's long term bank loan rating to A- and short term bank loan rating to A2+ from BBB+ and A2 respectively. This will help company to reduce its interest cost on the borrowings.
02:20pm PFC, REC divestment
The roadshow for the divestment in PFC and REC is likely to start on January 12 and continue till January 16, sources told CNBC-TV18.
The government plans to divest 5 percent in both these companies in FY15 and hopes to garner around Rs 3,000-3,400 crore via stake sale. The roadshows will be conducted in Hong Kong, Singapore, London, New York, Boston, Mumbai and Chennai.
However, sources indicate that NHPC stake sale and RINL, HAL listings are unlikely in FY15. There has been uncertainty too over the residual stake sale in HZL and BALCO during the current fiscal year as Finance Ministry is planning to send it back to Mines Ministry. But the government is hopeful of divesting its stake in Coal India before February.
The government has proposed to offload 10 percent stake in Coal India in FY15. According to sources, it may reserve 10 percent stock for Coal India employees in OFS. Sebi rules allow promoters to reserve up to 20 percent for retail investors.
The other mechanism that the Finance Minister may look at to offload more stake would be through CPSE ETF, launched last year.
02:00pm Market Check
The market extended gains in afternoon trade with the Sensex rising 375.64 points or 1.40 percent to 27284.46 and the Nifty climbing 129 points or 1.59 percent to 8231.10. The broader markets continued to outperform, the BSE Midcap and Smallcap indices jumped more than 1.8 percent.
About 1975 shares have advanced, 770 shares declined, and 403 shares are unchanged on the Bombay Stock Exchange.
Adrian Mowat of JPMorgan says oil price decline is a boon for Asian consumers. "This is an excellent buying opportunity in global equities, reasonable to expect 20 percent returns in India this year, new government has been working ever since it came to power," he adds.
Asian equity markets with the exception of Shanghai gained today. Europe gained more than a percent. However, Brent crude erased all its gains, falling 0.37 percent to USD 50.96 a barrel while US crude lost 0.08 percent to USD 48.61 a barrel.
The Indian rupee too extended recovery, rising 48 paise to 62.69 a dollar.
Coal India gained over 1 percent after trade unions called off their strike late last evening. Coal Minister, Piyush Goyal says workers' issues have been addressed. Morgan Stanley remains equalweight on the stock.
In a bid to deliver at least USD 400 million of cost savings in 2015, Standard Chartered announced closure of its loss-making institutional cash equities and equity research operations. The bank says this move is expected to impact nearly 200 roles immediately and expects a reduction of almost 2,000 people in 2015.
1:50 pm Result poll: Infosys, the second largest software services exporter in India, is expected to report a 1.9 percent growth in profit at Rs 3,157 crore (excluding forex loss/profit) for the quarter ended December 2014, according to average of estimates of analysts polled by CNBC-TV18. Profit in the previous quarter was Rs 3,096 crore.
The IT exporter will announce its third quarter earnings on Friday. Revenue may jump by 3.3 percent sequentially to Rs 13,783 crore and dollar revenue may increase by 1 percent quarter-on-quarter to USD 2,222 million during October-December quarter. Analysts believe the quarterly performance of the company may be impacted by seasonal weakness and cross currency headwinds.
1:30 pm Buzzing: Shares of Berger Paints and Asian Paints were up 4-10 percent (respectively) intraday. Macquarie has initiated coverage on both the stocks with outperform rating. It expects Berger Paints to touch Rs 509 calling it a challenger in the Indian paints market and thinks that its investment in advertising &promotions and capacity will pay good dividends.
"We expect Berger's gross margins to expand by 200bps over FY15-17E due to lower crude prices. Combination of higher margin premium product, lower crude prices and operating leverage can aid a 220 basis points improvement in EBITDA margin in FY15-17E," it elaborates in a report.
Buying interest is seen in Berger also because it turned ex-stock split in the ratio of 2:1 today. Shares having face value of Rs 2 will be divided into two shares of Rs 1 face value.
Macquarie expects Asian Paints to grow faster (18.8 percent revenue CAGR over FY15-17E) than the industry (16.7 percent CAGR over the same period) given its size and its focus on advertising, promotion and distribution.
The market continues to hold its gains with major support from FMCG and bank stocks. The Sensex is up 282.77 points or 1 percent at 27191.59 and the Nifty is up 95.35 points or 1 percent at 8197.45. About 1933 shares have advanced, 726 shares declined, and 405 shares are unchanged.
Tata Motors, HUL, ITC, Tata Power and GAIL are top gainers in the Sensex. Among the losers are Reliance, Sesa Sterlite, Bajaj Auto and Hero MotoCorp.
Gold prices fell by Rs 180 to Rs 26,981 per ten grams in futures trading today as speculators trimmed positions amid a weak global trend. At the Multi Commodity Exchange, gold for delivery in February fell by Rs 180, or 0.66 percent, to Rs 26,981 per 10 grams in a business turnover of 1,823 lots. Similarly, the metal for delivery in April declined by Rs 168, or 0.61 percent, to Rs 27,220 per 10 grams in 57 lots.
Analysts attributed the fall in gold futures to weak global trends as oil prices recovered before a US jobs report that will provide clues on the outlook for interest rates. Meanwhile, gold fell 0.5 percent to USD 1,204.97 an ounce in Singapore.
12:59pm SPML Infra in focus
Investors queued up for buying shares of SPML Infra today after the company received orders in Karnataka and approval for qualified institutional placement (QIP). The stock rallied 7 percent.
"The shareholders of SPML in its extraordinary general meeting held, on January 6, approved and authorized the board of directors to raise funds through QIP route upto Rs 75 crore," said the infrastructure company in its filing to the exchange.
Meanwhile, the company also received orders worth Rs 334 crore from Karnataka Urban Infrastructure Development and Finance Corporation (KUIDFC) for 24X7 water supply system for three cities, Bellary (Rs 136.41 crore), Hospet (Rs 117.95 crore) and Raichur (Rs 79.5 crore).
These projects are part of Asian Development Bank (ADB) funded projects to improve urban services in towns and cities in Karnataka.
"SPML has received these contracts to design and construct the infrastructure of the distribution networks, provide metered connections and operate and maintain the facilities for 5 years after completion," the company said.
12:40pm Market Expert
Although market may be volatile on the back of global cues, India is very well place amongst emerging markets, that's the word coming in from Vikas Khemani, CEO at Edelweiss Financial Services. In addition, he feels any pullback should be used as a buying opportunity in the market.
Onto macros, he believes the government is committed towards upgrading production activities with focus on cutting non-planned expenditure, which in turn is good for the economy. However, real impact will be seen by the end of the coming fiscal, he says in an interview to CNBC-TV18.
Two-wheelers will continue leading the auto pack even in 2015, despite having reported weak demand in December, says Society of Indian Automobile Manufacturers (SIAM) President Vikram Kirloskar.
According to him, the lower demand for two-wheeler vehicles in December may just be a one-off as there is a lot more scope for growth of two-wheelers in India.
In an interview to CNBC-TV18, Kirloskar says the auto industry grew about 2-3 percent last year but this year it is expected to double its growth rate to around 5 percent.
12:00pm Market Check
Equity benchmarks climbed higher today with the Sensex holding 27000 level. All sectoral indices traded in the green with the FMCG, auto and banking stocks leading with strong gains.
The 30-share BSE Sensex rose 276.57 points or 1.03 percent to 27185.39 and the Nifty jumped 91.05 points or 1.12 percent to 8193.15. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.6 percent and 1.8 percent, respectively.
More than three shares advanced for every share declining on the Bombay Stock Exchange.
Asian equity markets with the exception of Shanghai gained as the fall in oil prices abated and a positive finish on Wall Street overnight lifted trading sentiment. Crude halted its 4-day drop, Brent crude got back above USD 50 a barrel, up 33 cents to USD 51.5 a barrel.
Back home, the rupee rose to over a one week high to trade below the 63 per dollar mark as exporters and foreign banks stepped up dollar sales. Bonds softened but markets are expecting profit booking ahead of Friday's Rs 14,000 crore auction.
Coal India gained 2 percent after trade unions called off their strike late last evening. Coal minister, Piyush Goyal says workers' issues were addressed. Morgan Stanley remained equalweight on the stock.
BPCL topped the Nifty charts, up as much as 4.5 percent after CLSA upgraded the stock to buy with a target price of 800. The brokerage preferred BPCL over IOC and HPCL.
Kotak Mahindra Bank and ING Vysysa Bank reacted positively to both the extraordinary general meeting going through successfully last evening. Shareholders of both banks approved the merger, taking way for the USD 2.5 billion deal announced in November. Both stocks rallied 3 percent.
11:45 am Midcap bets: Brokerage house HSBC says it is positive on Indian midcap companies in 2015 and has forecast a target of 12,950 for the BSE Midcap index by end of December. The index has risen 54 percent over the last one year, and with the macro-economic environment improving, HSBC is betting that the strong performance will sustain in the medium term The three themes that HSBC is looking to play in this space are uptick in utilisation and operating leverage, strong earnings momentum with reasonable valuations, and lastly, business in transformation.
11:30 am Truce: Coal India unions, protesting against a move to open up the industry to private firms, called off a five-day strike on its second day on Wednesday after a meeting with the coal and power minister, staving off a looming power crisis.
The company accounts for about 80 percent of India's total output and strikes have previously crippled power plants, hampering government efforts to reform the coal industry. Coal fuels 60 percent of the country's power production.
Coal India struggled to produce and ship less than half of its daily target on Tuesday, the first day of the strike, threatening to exacerbate a shortage of the fuel.
A union leader said they decided to end the strike late on Wednesday after minister Piyush Goyal agreed to form a committee to look into any issues with a recently passed executive order, which would allow private companies to mine and sell the fuel for the first time in 42 years.
The market climbs higher today with the Nifty hitting 8200 in early trade. The 50-share index is up 86.55 points or 1 percent at 8188.65. The Sensex is up 264.77 points or 0.9 percent at 27173.59.
About 1788 shares have advanced, 506 shares declined, and 386 shares are unchanged.
BPCL, Asian Paints, Tata Motors and Cairn India are top gainers in the Nifty. Among the losers are Reliance, Sesa Sterlite, Zee Entertainment, Power Grid and Bajaj Auto.
Kotak Mahindra & ING Vysysa react positively to both the EGMs going through successfully last evening. Shareholders of both banks approved the merger making way for the USD 2.5 deal announced in November.
Rupee rises to over a one week high on exporters and foreign banks stepping up dollar sales. Bonds soften but markets are expecting profit booking ahead of tomorrow's Rs 14,000 crore auction.
10:45am Infosys to kick off Q3 earnings season on Friday
Infosys, the second largest software services exporter in India, is expected to report a 1.9 percent growth in profit at Rs 3,157 crore (excluding forex loss/profit) for the quarter ended December 2014, according to the average of estimates of analysts polled by CNBC-TV18. Profit in the previous quarter was Rs 3,096 crore.
Revenue may jump by 3.3 percent sequentially to Rs 13,783 crore and dollar revenue may increase by 1 percent quarter-on-quarter to USD 2,222 million during October-December quarter.
Analysts believe the quarterly performance of the company may be impacted by seasonal weakness and cross currency headwinds. Weak outlook during the quarter from TCS already tempered expectations of a positive surprise by IT companies. Hence, reported dollar revenue growth at 1 percent may be lower than constant currency growth of 2.5 percent.
Earnings before interest and tax (EBIT) may grow 2.7 percent quarter-on-quarter to Rs 3,576 crore but margin may be flat at 25.95 percent in the quarter ended December 2014 compared to 26.1 percent in previous quarter.
10:30am Kotak, ING in focus
Shareholders have approved merger of Kotak Mahindra Bank and ING Vysya Bank with a share exchange ratio of 725:1000.
''The amalgamation was approved by 99.30 percent in number representing 99.93 percent in value of the shareholders present. The merger is subject to the approval of Reserve Bank of India (RBI), Competition Commission of India (CCI) and such other approvals as may be required,'' a press statement said.
The extraordinary general meeting (EGM) of the members of ING Vysya Bank and Kotak Mahindra Bank was held in Bengaluru and Mumbai respectively.
The merger will be done through a share swap in which 725 equity shares of Rs 5 each of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank.
Post the merger that was announced on November 20, 2014, Kotak Mahindra Bank will become the fourth largest private sector lender in India. The biggest three are ICICI Bank, HDFC Bank and Axis Bank. The combined banking entity will have a widespread network of 1214 branches across the country.
However, employees and officers of ING Vysya Bank had expressed concerns over their future post the merger.
10:15am FII View
Jyotivardhan Jaipuria, Bank of America Merrill Lynch says earnings growth, which weakened last quarter, is unlikely to recover in Q3FY15 with headline Sensex profit growth at a mere 4.2 percent on a consolidated basis and ex-oil growth at only 6 percent.
''A quarter of the Sensex companies are expected to a show a drop in profits. This is in-line with our view that earnings will recover gradually and show sharp growth from H2FY16,'' he adds.
''Near-term, we continue to expect markets to be rangebound with bouts of correction due to slower than expected growth," says Jaipuria.
10:00am Market Check
Equity benchmarks saw some profit booking at higher levels but the Sensex still held above the 27000 level supported by banking & financials, capital goods, FMCG and auto stocks.
The index rose 220.78 points to 27129.60 and the Nifty gained 72.70 points at 8174.80. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.5 percent each.
More than five shares advanced for every share declining on the Bombay Stock Exchange.
Shares of HDFC Bank, HDFC, Tata Motors, ICICI Bank and State Bank of India were major contributors to the Sensex gains, up 1-2 percent. Hindustan Unilever, Sun Pharma, Maruti Suzuki, Bharti Airtel, Wipro, Coal India, Cipla, NTPC, BHEL and Tata Power surged 1-2 percent.
However, ONGC, Reliance Industries and Sesa Sterlite were only losers in the Sensex, down 0.3-0.8 percent.
In the broader space, Berger Paints rallied 7 percent after sub division of shares from Rs 2 to Re 1.
9:55 am Grexit reality? Germany's Angela Merkel played down the chances of a Greek exit from the euro zone, but made clear she expected Athens to stick to the terms of its international bailouts after this month's election.
The chancellor addressed the issue for the first time since a German magazine said at the weekend her government had shifted its stance and was ready to accept a "Grexit" if Athens failed to meet its commitments under EU/IMF rescue packages totalling 240 billion euros.
She said she had "no doubts whatsoever" that the Greek situation would be brought to a "successful conclusion", but stressed Athens needed to continue to respect its commitments if it wanted its partners to show solidarity.
As they plan for a possible clash with a new Greek government over bailout terms, they are also exploring a political compromise with the Syriza leader should he take power after the Jan. 25 election.
9:45 am FII view: Adrian Mowat, Chief Asian and Emerging Equity Strategist, JP Morgan is not worried about the fall in crude price. According to him, the fall in oil prices is a boon to G3 consumers and the importing Asian countries.
In an interview to CNBC-TV18, Mowat says the current correction in the global markets must be used as a good buying opportunity. He expects a reasonable 20 percent return from the Indian equities in 2015. 'Domestic institutions will be key drivers of Indian equities this year,'' he adds.
On the upcoming Budget, Mowat says it is a single day event and must not be given too much importance. The day-to-day operations of government matter more than just a one-day affair. He believes the Modi-led government has been working every day since it came to power and hence, Budget event is not a big event.
9:25 am Big buzzing: ING Vysya jumped 2.5 percent while Kotak Mahindra gained 3 percent intraday after shareholders have approved merger of both the banks.
The merger will be done through a share swap in which 725 equity shares of Rs 5 each of Kotak Mahindra will be issued for every 1,000 shares of Rs 10 each held in ING Vysya Bank. The swap ratio indicates price of Rs 790 for each ING Vysya Bank share.
Post the merger that was announced on November 20, 2014, Kotak Mahindra Bank will become the fourth largest private sector lender in India. The biggest three are ICICI Bank, HDFC Bank and Axis Bank.The combined banking entity will have a widespread network of 1214 branches across the country.
After the massive losses in last few days, the market has opened with a bang on Thursday. The Sensex is up 312.29 points or 1 percent at 27221.11 and the Nifty is up 89.30 points or 1 percent at 8191.40. The 50-share index touched 8200 briefly just immediately in opening. About 491 shares have advanced, 65 shares declined, and 351 shares are unchanged.
All banks are up with key gainers like SBI and ICICI BAnk. Wipro, Coal India and Tata Motors are other gainers in the Sensex.
The Indian rupee has opened at 63.20 a dollar , down 3 paise compared to previous day's closing value of Rs 63.17 a dollar.
Mohan Shenoi, Kotak Mahindra Bank says dollar rally against major currencies has continued on the back of strong US data and FOMC statement on expected lines. Risk sentiment has improved and consequently minor pull back in Indian stock market which earlier saw steep fall is likely. This should support rupee and USD-INR is expected to trade in a range of 63.10-63.40/USD today."
Meanwhile, the euro held near a nine-year low as investors fear the European Central Bank would have to take bolder stimulus steps to combat growing deflationary pressures in the zone.
In the US, stocks jumped with the S&P 500 rebounding from a five-session dive, as US crude stopped a four-day skid, concerns eased about a Greek exit from the European Union and investors offered a favorable reaction to minutes from the Federal Reserve.
In Europe, shares ended higher, with investors anticipating more stimulus by the European Central Bank after new data showed that the euro zone has entered into deflation. Meanwhile, Germany has left the door open to discussing options with Greece's next government on its debt.
However, Asian markets are moving higher this morning on the back of a strong overnight handover as global fears ease.
In commodities, crude prices rise following an unexpected drop in crude inventories and a positive economic outlook in US. US crude inventories fell 3.1 million barrels compared with analysts' expectations for an increase of 880,000 barrels.
From precious metals space, gold eased, halting a three-day winning streak, after the Federal Reserve released the minutes from its mid-December meeting.