Sensex ends up 299 points, Nifty at 8723 ahead of Fed meet
17 March 2015
03:30 Market close: Consolidating for second consecutive day, the market ended with some robust gains ahead of Fed meet. The Sensex ended up 298.67 points or 1 percent at 28736.38 and the Nifty was up 90.15 points or 1 percent at 8723.30. About 1355 shares have advanced, 1461 shares declined, and 197 shares are unchanged.
Hindalco surged 5 percent while Sesa Sterlite and Dr Reddy's Labs gained up 3-4 percent. Axis Bank and BHEL were other top gainers in the Sensex. Among the losers were Infosys, Bharti Airtel, Wipro, Coal Indi and HUL.
03:15 pm Market cap leader: Drug major Sun Pharmaceutical Industries surpassed SBI, country's largest public sector lender, in terms of market valuation.
Sun Pharma's market capitalisation (m-cap) increased to Rs 2,15,394.82 crore, following over one percent rally in the stock at the BSE, overtaking SBI whose valuation stood at Rs 2,09,488.41 crore during the afternoon trade.
With this, Sun Pharma now stands at eight position in the list of top-10 most valued companies in terms of their market capitalisation, followed by SBI at ninth place. TCS is the most valued Indian company with a market cap of Rs 5,04,068.85 crore, followed by RIL, ITC, ONGC, HDFC Bank,Infosys, CIL, Sun Pharma, SBI and HDFC.
Market capitalisation of a listed company corresponds to the cumulative market price of all its shares. This figure changes daily with change in stock price.
03:05pm Market Update: The market gained strength again in late trade with the Sensex rising 261.03 points to 28698.74 and the Nifty climbing 70.05 points to 8703.20. Dr Reddy's Labs rallied 4 percent. HDFC and Tata Motors jumped 2 percent each. Hindalco Industries shot up nearly 6 percent.
02:50pm HDFC Securities on Suzlon: Brokerage house HDFC Securities initiated coverage with a buy on Suzlon Energy and target price of Rs 34 apiece.
Having faced multiple crises over FY09-14, the brokerage believes Suzlon is on the cusp of a turnaround. It has aggressively reduced debt from its heavily levered balance sheet by divesting its German subsidiary Senvion (for Euro 1 billion) and via a preferential issue of Rs 1,800 crore to Dilip Shanghvi and Associates (DSA).
"These developments will enable the company to not only reduce debt but also provide much needed working capital to ramp up business in the rapidly growing Indian wind energy market," said HDFC Securities in its note.
With the NDA government's ambitious plans for renewable energy, the brokerage expects favourable policy environment for wind power to continue. According to the note, Suzlon is among a handful of listed companies levered to India's fast growing renewables industry.
Aided by significant operating and financial leverage, it expects Suzlon's earnings to grow manifold over the next few years.
02:30pm Cairn in Focus: Rating agency Moody's today said the Rs 20,465 crore tax demand raised on Cairn India is negative for its parent company Vedanta Resources.
"The tax dispute comes at a time when Vedanta is already struggling to stave off the effects of weak oil prices. If the liability materialises, Vedanta's credit profile would be weaker than the parameters required by its current rating..." Moody's VP and Senior Credit Officer Alan Greene said.
Last week, Income Tax Department has slapped a Rs 20,495 crore tax demand on Cairn India for allegedly failing to pay taxes on gains made by its former parent (Cairn Energy) in a share transfer transaction about eight years ago.
"Vedanta Resources Plc's 'Ba1' corporate family rating and 'Ba3' senior unsecured ratings are under negative pressure because of a demand by Indian revenue authorities that Cairn India should pay a USD 3.2 billion tax liability," Moody's Investors Service said.
An adverse outcome for Vedanta in relation to the tax dispute could also lead to a ratings downgrade, it added.
It said Vedanta's credit metrics are already at the lower end of its rating category. The rating agency had revised the company's ratings outlook to negative in January 2015 to reflect the company's likely lower earnings due to depressed global oil prices.
Moody's said it has kept Vedanta's ratings and outlook unchanged, because it believes the tax claim will not lead to any immediate cash demand, and that the final amount could vary, given that Vedanta is challenging the liability.
02:00pm Market Check: The market came off day's high in afternoon trade due to selling in banks and technology stocks. The Sensex rose 83.79 points to 28521.50 and the Nifty advanced 23.80 points to 8656.95.
The BSE Midcap and Smallcap indices lost gains too, trading flat. About 1224 shares have advanced, 1495 shares declined, and 175 shares are unchanged on the BSE.
Sachin Shah, Fund Manager, Emkay Investment Managers believes the market is still in a consolidation phase and the rally seen in the market today could be on back of global market rally.
Also after the fall seen across the board, the market could be witnessing some buying, he adds.
Hindalco topped the buying list on Sensex, up 5 percent. Dr Reddy's Labs, Tata Motors, Sesa Sterlite, BHEL and Cairn India climbed 1.4-2.6 percent.
However, Jindal Steel tanked 12 percent as media report said the government is expected to reject 2 bids from JSPL's Gare Palma & Tara coal blocks. Infosys, Wipro, Coal India, Bharti Airtel, HUL, Bank of Baroda and PNB declined 0.8-2 percent.
Gulf Oil Corporation, South Indian Bank, Suven Life, HCL Technologies, Jindal Steel, M&M and Reliance Industries were most active shares on exchanges.
1:45 pm Market outlook: Indian equities have shown some signs of struggle recently, with the Nifty coming off a top of about 9,100 to nearly 8,650 in 15 days. The outlook for the medium term – from now till about October – looks clouded as ''headwinds have been growing while tailwinds are reducing'', CNBC-TV18 consulting editor Udayan Mukherjee said in an interview.
The veteran anchor and financial journalist said that in the wake of earnings not picking up as much as earlier thought and with valuations continuing to remain slightly uncomfortable, the Nifty could stay in a 8,500-9,100 range in the medium term. ''Given the run of play, for investors, it should be prudent to buy on sharp declines instead of chasing rallies,'' he said. ''Let attractive stock prices come to you instead you going to seek them.''
1:30 pm Buzzing: Shares of Hitachi Home and Siemens rallied 6.6 percent and 2.9 percent intraday on Tuesday (respectively) after signing memorandum of understanding (MoU) with Confederation of Indian Industry for setting up 100 smart cities.
Amitabh Kant said that while cities occupy only 3 percent of the total geographical area of the world, they contribute nearly 80 percent of GDP and 2/3rd of global emissions. According to hime, smart city initiative shall be driven by technology driven companies.
The much awaited Smart Cities project is likely to be rolled out next month as the extensive consultation process with all stakeholders has concluded.
The market consolidates for second day as the Sensex is up 87.93 points at 28525.64. The Nifty is up 27.35 points at 8660.50. About 1269 shares have advanced, 1297 shares declined, and 178 shares are unchanged.
Hindalco, Dr Reddy's Labs, Sesa Sterlite, Tata Motors and Tata Steel are top gainers in the Sensex. Among the losers are Bharti Airtel, Infosys, M&M, Tata Power and GAIL.
Fertilisers and Chemicals Travancore (FACT) jumps 17 percent on hopes of a revival plan by government.
US crude fell to near six-year lows in Asia, extending losses in New York as worries about a global oversupply were exacerbated by OPEC warning of a continued petroleum glut, analysts said.
US benchmark West Texas Intermediate (WTI) for April delivery was down eight cents to USD 43.80 in late morning trade, the lowest since March 2009. Brent crude for May, a new contract, rose 27 cents to USD 54.21. Both contracts fell sharply yesterday after a report by the OPEC oil cartel that questioned the strength of last month's rally, saying the increase came "despite the fact that global supply continued to exceed demand".
12:50pm Smart City initiative: Hitachi India and Siemens signed a MoU with CII in the capital today to form a consortium that would create pilots and replicate them throughout the country for setting up 100 smart cities, according to the release published on Press Information Bureau website.
The MoU was signed on behalf of Hitachi by their MD, Ichiro Iino and MD, Siemens, Sunil Mathur and DG, CII Chandrajit Banerjee in the presence of DIPP Secretary Amitabh Kant.
Amitabh Kant said that while cities occupy only 3 percent of the total geographical area of the world, they contribute nearly 80 percent of GDP and 2/3rd of global emissions. Hence, there was a challenge to do urbanisation in an innovative and systematic manner.
Kant said that learnings gathered from the best practices across the world in the management of water, public resources, public spaces and technology etc shall be shared while implementing the smart cities concept in India. He said that smart city initiative shall be driven by technology driven companies.
12:25pm FACT in News: The fertiliser ministry has decided that it will take further steps towards the revival of FACT. Jaiveer Srivastava, CMD, FACT says the earlier revival package of Rs 991 crore is no more valid. The company needs atleast Rs 2,000 crore to pay off its arrears and undertake expansion plans.
FACT has submitted its medium and long-term plans to the government and says it needs to go ahead with expansion plans for the company's growth.
It has two plants in Kochi, which can cater to its NPK, ammonia and ammonia sulphate needs.
There is more good news for the company. The Kerala government waived off VAT on LNG being used by the company. It received around Rs 600-800 crore subsidy from the government every year.
12:00pm Market Check: The market trimmed its gains in noon trade. The 30-share BSE Sensex rose 159.62 points to 28597.33 and the Nifty climbed 44.85 points to 8678. About 1377 shares have advanced, 1073 shares declined, and 198 shares are unchanged on the BSE.
Market is likely to consolidate near term, but investors should use every weakness to buy shares, said Madhu Kela, Chief Investment Strategist, Reliance Capital.
He advised investors not to be pessimistic as a deep correction looks unlikely.
Concerns about a rate hike by the US Federal Reserve, and slower than anticipated recovery in the economy as well as corporate earnings have been keeping investors edgy over the last couple of weeks, he added.
Hindalco Industries topped the buying list on Sensex, up nearly 5 percent followed by HDFC, Tata Motors, Reliance Industries, L&T, Sun Pharma, Axis Bank, Cipla, Tata Steel, Sesa Sterlite and BHEL with the 1-2 percent gain.
Dr Reddy's Labs surged 3 percent. Citi said the company has responded to USFDA observations at the Srikakulam plant but haven't heard from the US authority as yet. Citi reiterated that the issues are unlikely to be materially disruptive.
Jindal Steel & Power continued to be under pressure, down 4 percent on reports that the government may reject two bids from company's Gare Palma & Tara coal blocks. The government could cite low bids and cartelization as the reason.
However, Infosys fell more than 1 percent. Mahindra & Mahindra, Bharti Airtel, GAIL and Wipro also declined.
11:55 am Airport woes: Delhi International Airport Ltd (DIAL), a subsidiary of GMR Infrastructure, has exited from cargo services at the Delhi airport by selling its entire stake to India Infrastructure Fund for Rs 29 crore.
"Accordingly as per the terms of definitive agreement and on completion of condition precedents, DIAL on March 16, 2015 has sold and transferred its entire holding of 1,09,20,000 equity shares of face value of Rs 10 each, to India Infrastructure Fund-II for Rs 26.20 per share and has received the total consideration of Rs 28.60 crore," GMR Infra said in a regulatory filing to the BSE.
Last month DIAL had entered into a definitive agreement to sell its entire stake of 26 percent of the equity capital of Delhi Cargo Service Centre Pvt.Ltd which operates cargo services at Delhi airport.
11:30 am Market outlook: The market is likely to consolidate near term, but investors should use every weakness to buy shares, says Madhu Kela, Chief Investment Strategist, Reliance Capital.
In an interview to CNBC-TV18, he advises investors not to be pessimistic as a deep correction looks unlikely.
Concerns about a rate hike by the US Federal Reserve, and slower than anticipated recovery in the economy as well as corporate earnings have been keeping investors edgy over the last couple of weeks.
Kela says retail investors are still waiting on the sidelines, but expects domestic fund flows to be a major upside trigger for the market. This and a pick up in earnings growth will drive re-rating, he says.
Investors seem to be on a buying spree on Dalal Street. The Sensex is up 299.88 points or 1 percent at 28737.59 and the Nifty is up 89.35 points or 1 percent at 8722.50. About 1450 shares have advanced, 755 shares declined, and 158 shares are unchanged.
Sesa Sterlite, Hindalco, Tata Motors, Dr Reddy's labs and Cipla are top gainers in the Sensex while Bharti Airtel, Infosys and GAIL are among laggards.
Meanewhile, the SBI Composite Index, an indicator for tracking India's manufacturing activity, has shown a significant growth in output both in terms of month-on-month and yearly basis in March. The monthly index has shown robust growth of 58.5 in March 2015, from 47.6 in February 2015, signalling the highest pace of growth in last 48 months.
"Robust recovery in the month on month index may be attributed to seasonal factors as March sequential momentum is always higher," SBI said in a research note.
The monthly index had slipped from 52.6 in January 2015 to 47.6 in February 2015. The yearly SBI Composite Index for March 2015 inched up to 54.6 from 53.5 in February 2015, a 6-month high. The Index captures two components of the manufacturing cycle - month-on-month and year-on-year-growth on a scale of 0 to 100.
10:45am Buzzing Stocks: Dr Reddy's Labs gained 2.5% as Bank of America Merrill Lynch met with the management. "The company has responded to observations at Srikakulam post USFDA observations, as of now they have not yet heard back from USFDA. The company reiterated issues unlikely to be materially disruptive," BoAML said.
JSPL fell over 3.5 percent as media report said the government is expected to reject 2 bids from JSPL's Gare Palma & Tara coal blocks.
KPIT Technologies declined 1.5 percent as the management updated its Q4FY15 dollar revenue guidance. It expects revenue to be flat sequentially due to cross currency, and the FY15 guidance to be met in constant currency not in dollar terms. Company only sees marginal growth in PAT in FY15 compared to FY14.
Amtek Auto gained 4.5 percent on buying German-based Scholz via Singapore subsidiary. Scholz is a hot die forgings manufacturer. Management told CNBC-TV18 that EBITDA of acquired company is euro 14-15 million and the company will see increase in margins of acquired company in the first year.
10:25am China at 7-year high: China's main stock index rose to its highest in almost seven years today morning, breaking through a key psychological resistance level to raise investors' hopes that the market has resumed a bull run begun midway through last year.
The Shanghai Composite Index was on track to rise for a fifth consecutive day, hitting the highest level since June 2008, and standing firmly above 3,400 points - seen by many as a level where many investors tend to reduce holdings.
Trading volume, which touched two-month highs on Monday, continued to expand, as investors regained confidence after Chinese Premier Li Keqiang vowed on Sunday to support the economy if it continues to slide and hurt employment.
The CSI300 index rose 1.1 percent, to 3,745.19 points at the end of the morning session, while the Shanghai Composite Index gained 1.2 percent, to 3,489.46 points.
Hong Kong shares also rose, with the Hang Seng index up 0.3 percent, to 24,022.97 points, and the Hong Kong China Enterprises Index rising 0.5 percent, to 11,876.50.
10:00am Market Check
The market extended rally after a consolidation for last few sessions. The Sensex surged 325.04 points or 1.14 percent to 28762.75 and the Nifty climbed 89.70 points or 1.04 percent to 8722.85.
The broader markets gained too, the BSE Midcap and Smallcap indices rallied 1 percent each. About 1402 shares have advanced, 587 shares declined, and 134 shares are unchanged on the BSE.
Jyotivardhan Jaipuria, Bank of America Merrill Lynch said investors are overweight India, but he believes recovery may be some time away.
"While we are structural bulls on India with an index target of 54,000 by end-2018, we have been highlighting that we see the market being range-bound to negative over next few months. We believe investors should await dips in the market," he added.
Shares of HDFC, Tata Motors, Dr Reddy's Labs, Cipla, Hindalco and Sesa Sterlite topped the buying list on Sensex, up 2-3 percent.
9:55 am Market guru: Indian equities have shown some signs of struggle recently, with the Nifty coming off a top of about 9,100 to nearly 8,650 in 15 days. The outlook for the medium term – from now till about October – looks clouded as ''headwinds have been growing while tailwinds are reducing'', CNBC-TV18 consulting editor Udayan Mukherjee said in an interview. The veteran anchor and financial journalist said that in the wake of earnings not picking up as much as earlier thought and with valuations continuing to remain slightly uncomfortable, the Nifty could stay in a 8,500-9,100 range in the medium term.
9:40 am FII view: Brokerage house Bank of America Merrill Lynch feels India is vulnerable to a near term global correction as too many global fund managers own shares in this market. ''One of our near term concerns has been that investors are very overweight India; this makes India vulnerable to any near term global correction,'' says the Merrill Lynch note, adding that a macro recovery appears to be some way off. ''While we are structural bulls on India with an index target of 54,000 by end-2018, we have been highlighting that we see the market being range-bound to negative over next few months,'' the note further says.
9:30 am Buzzing: Shares of Zee Media Corporation rose over 3 percent intraday on fund raising plans via rights issue. The board of directors has approved proposal for rights issue to raise Rs 195.59 crore.
''The board of directors of the company at its meeting held on March 16, 2015, has approved the letter of offer for the proposed rights issue of up to 1,08,643,732 equity shares of Re, 1 each of the company at the issue price of Rs 18 per Share (including premium of Rs17 per share) aggregating to Rs 195.55 crore,'' it said in a statement to the BSE.
The rights issue will open on March 25 and close on April 08.
The market has opened strong following global cues. The Sensex is up 196.45 points or 0.6 percent at 28634.16, and the Nifty up 55.95 points or 0.6 percent at 8689.10. About 412 shares have advanced, 65 shares declined, and 89 shares are unchanged.
BHEL, Dr Reddy's Labs, Sesa Sterlite, ITC and Tata Power are top gainers in the Sensex. Among the losers are Cipla, Infosys and NTPC.
The Indian rupee opened marginally higher at 62.77 per dollar on Tuesday versus 62.81 Monday.
The dollar fell across the board, as investors worry that the greenback's rapid rise could prompt the Federal Reserve to be a little more cautious about raising interest rates this year.
The dollar is up 24 percent against a basket of currencies since May and it could become a key issue at this week's Fed monetary policy meeting
Ashutosh Raina of HDFC Bank said, "The dollar continues to remain the theme with the dollar index hovering around the 100 mark. The rupee has been a relative outperformer moving in 62.50-63.00/dollar range. We expect the rupee to continue trading in this range with a weakish bias."
Markets in the US closed more than 1 percent higher as investors cheered a pause in the dollar rally and eyed renewed weakness in oil prices ahead of Wednesday's key Fed meeting.
The Fed's policy committee will convene for its monthly two-day policy meeting today and a statement will be released on Wednesday night. Markets will be watching whether the central bank will eliminate the "patient" promise in its post-meeting statement, paving the way for an interest rate hike this year.
In Europe, equities finished higher as investor sentiment continued to be positive on the back of the extra liquidity provided by the European Central Bank (ECB) in the region.
In commodities, NYMEX crude is at a six-year low on signs of higher output in the US and Libya and a possible nuclear deal that could end sanctions for Iran, allowing more of its oil into the market.
From precious metals space - gold prices continue to trade near 3 month lows of USD 1150 an ounce.