Nifty ends at 8423, Sensex up 192 points on IT & bank support
20 May 2015
3:30 pm Market close: After a strong day, the market ended with handsome gains. The Sensex ended up 191.68 points or 0.7 percent at 27837.21 and the Nifty was up 57.60 points or 0.7 percent at 8423.25. About 1362 shares advanced, 1336 shares declined, and 190 shares were unchanged. IT and bank stocks supported indices. Tata Power, TCS, HDFC twins and Wipro were top gainers in the Sensex. Among the losers were Bajaj Auto, Tata Steel, BHEL, Hindalco and Axis Bank.
3:10 pm Why the surge? Foreign portfolio investors, key behind Indian stocks hitting record high in March, have bought cash shares worth nearly USD 300 million in the past three days, Thomson Reuters calculations showed. They had sold about USD 2.5 billion worth of shares over the last four weeks.
Overseas investors had trimmed positions in Indian cash equities but it was still a favoured market, UBS said in a report, citing feedback of 100 investors meeting it conducted globally.
India's weather office said on Thursday it expects monsoons to hit the southern Kerala coast around May 30, a timely arrival for farmers worried about dry weather from an El Nino weather pattern this year.
2:50 pm Sebi norms: Simplifying norms for domestic funds to manage offshore pooled assets, Sebi has dropped '20-25 rule', which required a minimum of 20 investors and a cap of 25 percent on investment by an individual, for funds from low-risk foreign investors.
As per the existing norms, a fund manager who is managing a domestic scheme, is allowed to manage an offshore fund, subject to three specific conditions.
The first requires the investment objective and asset allocation of the domestic scheme and of the offshore fund to be the same. The second condition requires at least 70 percent of the portfolio to be replicated across both the domestic scheme and the offshore fund.
The third condition, which was being considered as the most stringent by the industry, requires that the offshore fund should be broad-based with at least 20 investors with no single investor holding more than 25 percent of the fund corpus.
2:30 pm Interview: Talking about the business outlook for the next fiscal, Govardhan Dhoot, MD, Mangalam Drugs & Organics in an interview to CNBC-TV18 said currently they are awaiting World Health Organisation (WHO) approvals for new malaria and HIV molecules and are likely to get the approval by December.
He said they are targeting a 20 percent revenue growth in FY16. The company is also looking at inorganic opportunities, said Dhoot.
The company is into manufacturing APIs for malaria & HIV drugs and is the world's largest manufacturer of anti-malarial active pharmaceutical ingredient (APIs) with manufacturing facilities in Vapi, Gujarat.
The company has 50-60 percent market share in the anti-malaria space with clients such as Ajanta Pharma, Cipla, Sanofi, Novartis, and IPCA.
The market is firing up as the Sensex is up 178.10 points or 0.6 percent at 27823.63 and the Nifty is up 53.55 points or 0.6 percent at 8419.20. About 1293 shares have advanced, 1277 shares declined, and 184 shares are unchanged.
Tata Power, Wipro, SBI, TCS and HDFC are top gainers while Bajaj Auto, Tata Steel, BHEL, Hindalco and Tata Motors are among laggards in the Sensex.
Meanwhile, Indian Oil Corp (IOC) is seeking a total of 15,500 tonnes of jet fuel and superior kerosene for June 15-17 arrival at Chennai and Vasco in Goa, likely the third time this year the state-owned refiner is looking to import middle distillates.
IOC is seeking 5,000 tonnes of jet fuel, to be co-loaded with 500 tonnes of superior kerosene, for delivery to Vasco through a tender closing on May 25, with offers to stay valid until May 27, traders said on Wednesday. It will also buy another 5,000 tonnes of jet fuel, to be co-loaded with similar volumes of superior kerosene, for delivery to Chennai.
2:30 pm Boardroom: Entertainment Network India Limited ( ENIL ) reported a good set of Q4 earnings with the profit up 20 percent year-on-year. ENIL is the subsidiary of Times Infotainment Media Limited and operates the radio channel Radio Mirchi 98.3FM. Speaking to CNBC-TV18 Prashant Panday, MD & CEO, ENIL says the companys revenue has risen about 13-13.5 percent and not 8.8 percent as has been reported. Likewise, our EBITDA reported at 9.7 percent actually bears the effect of various new costs this time, for instance the corporate social responsibility (CSR) contribution comes in, he adds. The company saw a steady quarter, with its margins remaining stable and its bottom line being lifted by higher income.
The Sensex is up 197.90 points or 0.7 percent at 27843.43 and the Nifty is up 58.50 points or 0.7 percent at 8424.15. About 1298 shares have advanced, 1161 shares declined, and 165 shares are unchanged.
SBI, Tata Power,TCS, HDFC Bank and Infosys are top gainers in the Sensex while losers are Tata Steel, Bajaj Auto, BHEL, Hindalco and Tata Motors are among losers. DLF is down 1 percent ahead of announcing its January-March quarter results.
Hawkish comments by the US Federal Reserve would be surprising, says Michael Every of Rabobank. The expectation of an interest rate hike has been pushed to the sidelines, he says. If it indeed happens, it can lead to an equity and treasury market selloff, he adds. If on the other hand, comments are dovish, it will make equity markets happy, he told CNBC-TV18.
On India, he feels the market here is dominated by political issues. The overall picture is good and investors are waiting for a policy push, he says. He, however, cautions that a lot depends on Fed policy ahead.
12:50 pm World news: Greece will not make a payment to the International Monetary Fund that falls due on June 5 if there is no deal with its creditors by then, the government's parliamentary speaker said on Wednesday. Athens faces several payments totaling about 1.5 billion euros to the IMF next month and it is in talks with the European Union and the International Monetary in order to clinch a cash-for-reforms deal before it runs out of cash.
"Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5," Nikos Filis told ANT1 television.
12:30 pm Market outlook: Vikas Khemani, CEO, Edelweiss Securities strongly believes market currently is in a consolidation phase but from a medium to long-term perspective, the downside for the market is protected backed by strong macro set up. According to him long-only funds are supporting a strong base for Nifty around 8000 levels. Market at present lacks any strong trigger and will remain in a consolidation phase until faith picks up in terms of growth prospects and earnings improvement, says Khemani in an interview.
The Sensex is up 199.12 points or 0.7 percent at 27844.65 and the Nifty is up 58.90 points or 0.7 percent at 8424.55. About 1315 shares have advanced, 976 shares declined, and 171 shares are unchanged.
Tata Power, SBI, TCS and HDFC twins are top gainers in the Sensex. Among the losers are Tata Steel, Bajaj Auto, Hindalco, BHEL and Tata Motors.
Faced with competition from mammoth new refineries in the Middle East and soft fuel demand in key markets, Asian refiners are trying a variety of tactics to cope from investing in refineries in emerging markets to using cheaper energy sources.
Less complex and older refineries in Asia, however, might be forced to cut run rates or shut, industry executives said at an energy conference.
11:50 am: Multilateral institutions like the IMF need to re-examine "rules of the game" but central banks should not ignore international responsibilities despite their domestic mandates, RBI Governor Raghuram Rajan has said. Rajan, in his address to the Economic Club of New York on Tuesday, made a strong case for the IMF to analyse each new unconventional monetary policy, including sustained unidirectional exchange rate intervention.
Rajan said based on their effects and the agreed rules of the game, the IMF should declare them "in or out-of-bounds."
"We also need better international safety nets. And each one of us has to work hard in our own countries to develop a consensus for free trade, open markets and responsible global citizenry," he said.
11:30 am Buzzing: Shares of Persistent Systems jumped 6 percent intraday as CLSA has initiated coverage with a buy rating and a target price of Rs 1000 per share. According to the brokerage, Persistents improving business mix towards enterprise aided by its strong tech capability, IP and early focus make it the ideal play on the disruptive industry trend. It expects social, mobile, analytics and cloud (SMAC)/digital to drive acceleration in dollar-revenue growth to 18 percent, earnings per share (EPS) growth of 21 percent FY16-18 and a re-rating to sector leading multiples. CLSA also feels that the software companys margins will recover by 240 basis points (bps) over FY15-18, with further onsite thrust counter balanced by higher billing rates (digital) and scale benefits on sales investments and improving staff pyramid.
The market is holding well its early gains. The Sensex is up 232.03 points or 0.8 percent at 27877.56, and the Nifty up 68.35 points or 0.8 percent at 8434.00. About 1315 shares have advanced, 773 shares declined, and 157 shares are unchanged.
Tata Power is up 3 percent while ICICI Bank, TCS, Infosys and Wipro are top gainers in the Sensex. Among the losers are Tata Steel, Hindalco, Coal India, ITC and Vedanta.
Rupee is weak on the back of a stronger dollar.
Globally, Asia is mostly higher with the Nikkei at 15-year highs after the Q1 GDP was better-than-expected.
The broad trend of the global share market is likely to remain up, with around 15 percent returns, says Shane Oliver, head of investment strategy & chief economist at AMP Capital Investors. He says a lot of the global volatility was due to back up in bond yields. According to him, despite the rich valuations, India continues to remain attractive.
11:50 am Results: Adhesives and industrial chemicals manufacturer Pidilite Industries reported 10.34 percent increase in its consolidated profit at Rs 80.64 crore for the fourth quarter ended March 31, 2015. It had posted a consolidated net profit of Rs 73.08 crore in the same period of last year, Pidilite Industries said in a filing to the BSE.
The company's net sales on a consolidated basis also increased 5.27 percent to Rs 1,037.44 crore during the January-March quarter as against Rs 985.47 crore a year ago.
For the full fiscal ended March 2015, Pidilite Industries' consolidated net profit rose 13.95 percent to Rs 512.56 crore as against Rs 449.80 crore in the previous fiscal. Its consolidated net sales also increased 13.14 percent to Rs 4,820.44 crore in 2014-15 as against Rs 4,260.59 crore in 2013-14.
11:30 am Rate cut? Raising concern over central banks globally being pushed into "competitive monetary easing", RBI Governor Raghuram Rajan on Tuesday said lower interest rates and tax incentives can boost investments, but it is consumer demand that holds the key for pushing economic growth. He also advocated stronger and well-capitalised multilateral institutions, as also better international safety nets. Speaking on the issue of 'Going Bust for Growth' at the Economic Club of New York, Rajan said: "The current non-system in international monetary policy is, in my view, a source of substantial risk, both to sustainable growth as well as to the financial sector. "It is not an industrial country problem, nor an emerging market problem, it is a problem of collective action. We are being pushed towards competitive monetary easing and musical crises," he said.
The market is surging ahead as the Sensex is up 249.41 points or 0.9 percent at 27894.94 and the Nifty is up 72.05 points or 0.8 percent at 8437.70. About 1265 shares have advanced, 451 shares declined, and 117 shares are unchanged.
Tata Power, ICICI Bank, TCS, Infosys and HDFC are top gainers in the Sensex. Among the losers are Tata Steel, Hindalco and Coal India.
Asian shares got off to a lacklustre start after a mixed day on Wall Street, though Japan's better-than-expected economic growth lifted the Nikkei to a nearly one-month high. The euro remained pressured by expectations that the European Central Bank would increase its bond-buying stimulus.
The euro licked its wounds after plunging more than 1 percent against the dollar in the previous session, after European Central Bank Executive Board member Benoit Coeure said the ECB could "moderately" increase its bond-buying programme in May and June, and possibly in September.
9:55 am Market outlook: While he is bullish on both India and China, Geoffrey Dennis of UBS, says the expensive valuations in India market are a cause of worry. In an interview to CNBC-TV18, Dennis says the US Federal Reserve is likely to raise rates in September, but that is less of a worry than the over-ownership of Indian stocks. Furthermore, he adds the brokerage firm only expects a 4 percent upside in emerging market (EMs) for the rest of the year as weak earnings will impact returns.
9:35 am Result poll: DLF 's net profit is likely to fall 29 percent to Rs 156 crore in January-March quarter from Rs 219.68 crore in corresponding quarter last fiscal. Revenue is seen almost flattish with 7 percent rise at Rs 2109 crore versus Rs 1969.4 crore year-on-year, according to a CNBC-TV18 poll. EBITDA is likely to be up 28 percent at Rs 861.5 crore compared to Rs 671.2 crore (Y-o-Y) while operating profit margin may come in at 40.8 percent from 34 percent on yearly basis.
While national capital region (NCR) market is still sluggish, DLF is expected to report good performance this quarter driven by strong pre-sales in its luxury housing projects-Crest and Camellias.
9:20 am Market check: The Sensex is up 184.58 points or 0.7 percent at 27830.11 and the Nifty is up 51.75 points or 0.6 perceny at 8417.40. About 826 shares have advanced, 204 shares declined, and 80 shares are unchanged.
The market has opened in positive terrain supported by technology stocks for second day. The Sensex is up 123.53 points at 27769.06 and Nifty is up 40.95 points at 8406.60. About 364 shares have advanced, 97 shares declined, and 65 shares are unchanged.
Tata Power is up 4 percent post its March quarter results. Other gainers in the Sensex are Infosys, ICICI Bank, BHEL and NTPC. Tata Steel is down 1 percent while Vedanta, Hindalco and Coal India are among laggards in the Sensex.
The Indian rupee opened lower by 10 paise at 63.77 per dollar versus 63.67 Tuesday. The dollar continues to gain on unexpectedly better US April housing data. Euro sells off spurred by hints the European Central Bank could take more action to lower euro zone bond yields and boost inflation.
Himanshu Arora of Religare said, The rupee is expected to trade higher today amid persistent strength in dollar index on worries that Greece may miss debt repayments next month.Fresh statements from FOMC, related to interest rate hike in the US may provide more cues for the rupee going forward. Range for the day is seen between 63.40-64.05/dollar.
Asia is mixed this morning as the Nikkei hits nearly 4-week high after strong Q1 GDP of Asia's second-largest economy expanded. Japan reports strong Q1 GDP at 2.4 percent.
Overnight in US stocks closed nixed as investors eyed renewed gains in yields and the dollar ahead of the Federal Reserve meeting minutes which is expected later today.
The European central bank is planning to speed up the pace of its bond-buying stimulus programme before the summer lull. Senior policymaker Benoit Coeure at a speech in London explained that the ECB wants to buy more bonds than average over the next six weeks, to avoid the "notably lower market liquidity" in late July and August. Coeure denied that the ECB is putting its foot on the accelerator to calm the bond markets, after seeing wild swings in the price of bunds in recent weeks.
Nymex crude slips over 3 percent as the dollar rallied amid evidence that the US and Saudi Arabia were pumping more than the world needed. Brent crude too slips to USD 64 per barrel.
From other asset class, gold tumbled 2 percent to USD 1205 an ounce, following a strong dollar.