Sensex up 473 points, Nifty ends above 7400 on global rally
22 January 2016
3:30 pm Market Closing: The market snapped two-day losses on Friday. The Sensex rallied 473.45 points or 1.98 percent to 24435.66 and the Nifty surged 145.65 points or 2 percent to 7422.45, tracking global rally and oil rebound.
The BSE Midcap index gained 1.9 percent and Smallcap surged 2.25 percent. More than three shares advanced for every share declining on the Bombay Stock Exchange.
GAIL, Hindalco Industries, Maruti Suzuki, Tata Steel, Hero Motocorp and M&M were top gainers, rising 5-8 percent while Bharti Airtel and Idea Cellular lost 3.36 percent and 6.23 percent, respectively.
2:58 pm Market Update: Equity benchmarks extended rally with the Sensex rising 480.50 points or 2.01 percent to 24442.71 and the Nifty up 147.60 points or 2.03 percent to 7424.40.
The market breadth remained strong as about four shares advanced for every share declining on the BSE.
2:45 pm Oil rises 5%: Oil prices rose 5 percent today to scale the USD 30 mark breached last week, as cold US and European weather as well as firmer financial markets gave traders reason to cash in on record short positions.
While crude futures on both sides of the Atlantic were poised for their first weekly gain this year, analysts cautioned that the bounce in prices could be driven by sentiment given soaring inventories amid persistent overproduction.
In its monthly report on Tuesday, the IEA said the world oil market would remain oversupplied for at least another year.
2:25 pm Earnings: L&T Finance Holdings, the subsidiary of engineering & infrastructure major, has reported a 16.7 percent year-on-year growth in consolidated profit at Rs 212 crore aided by net interest income.
Profit was also supported by operating performance that continued to remain steady with healthy margins, steady fee income and stable operating expenses, says the company, adding asset management business continued to contribute positively, which grew by 17 percent on yearly basis.
Consolidated net interest income, the difference between interest earned and interest expended, grew by 18.9 percent to Rs 805.2 crore in quarter ended December 2015 and income from operations jumped 15.8 percent to Rs 1,820 crore compared to year-ago period.
2:00 pm Market Check: The market maintained its strong uptrend in afternoon trade with the Sensex rising 430.53 points or 1.80 percent to 24392.74 and the Nifty up 135 points or 1.86 percent to 7411.80, tracking global rally.
The broader markets also traded in line with benchmarks as the BSE Midcap and Smallcap surged 2 percent each. More than three shares advanced for every share declining on the Bombay Stock Exchange.
European stocks rallied today, buoyed by dovish remarks from the European Central Bank (ECB), which signaled further monetary easing as early as March. The pan-european STOXX Europe 600 index was 1.9 percent higher. The FTSE 100 fell into bear market territory this week as oil prices collapsed but today gained 1.5 percent. France's CAC 40 was up 2.07 percent and the German DAX gained 1.55 percent.
1:50 pm FII view: The sell-off in January 2016, prompted by a declining oil and a slowing China story, was overdone and this market volatility will continue in the near-term, says Ian Hui, Global Market Strategist, JPMorgan Asset Management Company. Speaking to CNBC-TV18, Hui says the Chinese situation wasn't as bad as the market made it out to be. However, the dovish tone set by European Central Bank (ECB) in its move to provide more stimulus by March has proved to be positive for the equity markets, particularly Europe. He prefers developed markets - Europe, Japan and US - over emerging markets.
1:30 pm Boardroom: After Idea Cellular announced its third quarter numbers on Thursday, the thing that stood out was the margin pressure, despite profit and revenue coming in line with street expectation. Himanshu Kapania, MD of Idea Cellular, said this is on account of the fact that the company is trying to build massive wireless broadband infrastructure. Additionally, the company had also committed Rs 30,000 crore in March 2015 spectrum auction, he added. He further said data volume grew at 76 percent Year-on-Year (YoY), while data realisations declined 17 percent during the same period.
The market is holding firm with support from banks, capital goods, auto, pharma and metals. The Sensex is up 406.11 points or 1.7 percent at 24368.32 and the Nifty is up 132.70 points or 1.8 percent at 7409.50. About 1961 shares have advanced, 509 shares declined, and 141 shares are unchanged.
GAIL, Tata Steel, SBI, Hindalco and Axis Bank are top gainer in the Sensex. Among the losers are Bharti Airtel, Wipro, HUL and ITC.
The oil price slump is hitting home with layoffs and spending cuts but there may be one positive development amid the rash of bad news: companies are tightening their belts more swiftly.
"The silver lining is the velocity--how fast all of these companies have moved to cut cost and build efficiencies. It's measured in weeks and months while in previous cycles it would take much longer," said Thomas McNulty, a director at consultancy Navigant Capital Advisors,.
This should enable companies with healthy balance sheets to stay in the green, he told CNBC's The Rundown.
12:58 pm Market Update: The Sensex rallied 439.07 points or 1.83 percent to 24401.28 and the Nifty jumped 137.80 points or 1.89 percent to 7414.60.
About 1952 shares have advanced, 500 shares declined, and 136 shares are unchanged on the BSE.
12:35 pm Earnings Poll: Anil Dhirubhai Ambani Group company Reliance Communications ' third quarter earnings are expected to see rebound after a dismal performance in second quarter due to seasonality. Profit in Q3 is likely to grow 15.4 percent sequentially to Rs 180 crore and revenue may increase 2.5 percent to Rs 5,490 crore, according to average of estimates of analysts polled by CNBC-TV18.
Operating profit (earnings before interest, tax, depreciation and amortisation) may rise 3.1 percent quarter-on-quarter to Rs 1,838 crore and margin may expand 20 basis points to 33.5 percent in October-December period.
Meanwhile, the key focus would be on potential deleveraging as Reliance Communications announced mergers with MTS and a non binding merger talks Aircel.
12:20 pm Spectrum Auction: Government is likely to conduct next round of spectrum auction around May-June period this year, a top official said on Friday.
"We will put all available spectrum for auction in which ecosystem is available that industry is demanding. The auctions will be held sometime in May-June," Telecom Secretary Rakesh Garg said at FICCI-WBA Vision Forum.
Telecom Regulatory Authority of India (Trai) has put out a consultation paper on a reference made by the government to suggest the base or floor price for all available airwaves for mobile services.
The government had pegged revenue from communication services for the current fiscal at Rs 42,865 crore, which include upfront realisation from spectrum sale and licence fee. According to an official source, the government will be able to meet the Budget target even without the auction.
12:00 pm Market Check
The market rallied further in noon trade on further short covering in most beaten down stocks like banks, auto, oil and infra stocks. Asian markets extended uptrend with the Nikkei rising nearly 6 percent followed by Shanghai (up 1.2 percent) and Hang Seng (up 2.6 percent).
The 30-share BSE Sensex surged 429.29 points or 1.79 percent to 24391.50 and the 50-share NSE Nifty climbed 135.10 points or 1.86 percent to 7411.90. The broader markets also traded in line with benchmarks; the BSE Midcap index gained 1.9 percent and Smallcap rose 2.2 percent.
The market breadth was strong as about five shares advanced for every share declining on the BSE.
Aviation stocks were most active on exchanges as InterGlobe (owner of IndiGo) delivered its first quarterly earnings after listing. The stock plunged nearly 18 percent after Q3 and Q2 earnings. Jet Airways was down 6 percent and SpiceJet fell 4 percent. Fall in these stocks was also on account of rebound in crude oil prices. Brent crude gained 5.2 percent to USD 30.77 a barrel and Nymex crude rose 4.4 percent to USD 30.8 percent.
11:30 am Market outlook: While the last few days have been challenging, there was nothing local in this leg of correction, says Krishna Kumar Karwa of Emkay Global Financial Services. It was completely driven by global factors. However, he advises investors to be cautiously optimistic and says while India will benefit from lower oil prices, there will be some collateral damage in the short-term due to a fall in commodity prices. He also advises investors to buy high quality companies with strong balancesheets. He is bullish on sectors such as IT, pharma, among others.
The market is gaining gradually. The Sensex is up 392.57 points or 1.6 percent at 24354.78 and the Nifty is up 126.05 points or 1.7 percent at 7402.85. About 1811 shares have advanced, 370 shares declined, and 100 shares are unchanged.
GAIL, Hindalco, SBI, Axis Bank and NTPC are top gainers while Bharti Airtel, Adani Ports, ITC, Wipro and HUL are losers.
The sell-off in January 2016, prompted by a declining oil and a slowing China story, was overdone and this market volatility will continue in the near-term, says Ian Hui, Global Market Strategist, JPMorgan Asset Management Company.
Speaking to CNBC-TV18, Hui says the Chinese situation wasn't as bad as the market made it out to be. However, the dovish tone set by European Central Bank (ECB) in its move to provide more stimulus by March has proved to be positive for the equity markets, particularly Europe.
He prefers developed markets - Europe, Japan and US - over emerging markets.
10:50 am Market Update: The market climbed further with the Sensex rising 414.32 points or 1.73 percent to 24376.53 and the Nifty up 130.45 points or 1.79 percent to 7407.25.
About 1801 shares have advanced, 362 shares declined, and 103 shares are unchanged on the BSE.
10:35 am Earnings: Bangalore-based pharma company Biocon's third quarter profit increased 13.3 percent year-on-year to Rs 103 crore, supported by operational performance and other income but R&D expenses and slow revenue growth limited growth.
"Excluding profit contribution from Syngene, company's net profit rose by 28 percent Y-o-Y despite a 45 percent jump in R&D spends and significant increase in tax," says Kiran Mazumdar-Shaw, chairperson and managing director.
Revenue rose 8.7 percent to Rs 836.4 crore in quarter ended December 2015 compared to Rs 769.2 crore in year-ago period, driven by contract research business (under Syngene International) despite slow growth in biopharma and India branded formulations.
Subsidiary Syngene International reported a profit of Rs 59 crore in October-December quarter, a growth of 31 percent compared to Rs 45 crore in year-ago period. Revenue in same period increased 23 percent to Rs 281 crore from Rs 229 crore.
10:20 am Hatsun Agro in News: Hatsun Agro Product said its board has approved raising up to Rs 150 crore loans from its existing bankers.
In a filing to the BSE, the company informed that the Board of Directors of the company at its meeting has "approved availing of loan facility through Commercial Paper Programme with the existing bankers of the Company not exceeding Rs 150 crore".
Meanwhile, Hatsun Agro's standalone profit increased to Rs 17.55 crore during the quarter ended December from Rs 12.89 crore in the year ago period.
Total income from operations rose to Rs 830.98 crore from Rs 713.22 crore during the period under review.
10:00 am Market Check
Equity benchmarks extended short covering-led rally in morning trade with the Nifty eyeing 7400 aided by banks, auto, oil and infra stocks. The broader markets gained too, with the BSE Midcap and Smallcap indices rising over 1.3 percent.
The 30-share BSE Sensex rallied 323.30 points or 1.35 percent to 24285.51 and the 50-share NSE Nifty rose 100.60 points or 1.38 percent to 7377.40. The market breadth was strong as more than five shares advanced for every share declining on the Bombay Stock Exchange.
HDFC, ICICI Bank, Reliance Industries, L&T, HDFC Bank, Axis Bank, SBI, Tata Motors and Maruti Suzuki were leading contributors to Sensex's gains, up 1-3 percent while Bharti Airtel tanked more than 3.5 percent.
ITC declined 0.7 percent ahead of third quarter earnings today. A CNBC-TV18 poll expects profit growth of 5.2 percent and revenue 6.4 percent with volume 5-8 percent decline in cigarette volumes.
9:55 am FII view: Christopher Wood, CLSA says Greed & Fear far prefers India to China as a structural story since credit growth in India has been running more in-line with nominal GDP growth reflecting a healthy deleveraging cycle.
India bank credit growth slowed to 8.8 percent Y-o-Y in October before accelerating to 11 percent Y-o-Y in December, while nominal GDP growth slowed from 13.4 percent Y-o-Y in Q2FY14 to 6 percent Y-o-Y in Q3FY15.
9:45 am Result: Bangalore-based pharma company Biocon's third quarter profit increased 13.3 percent year-on-year to Rs 103 crore, supported by operational performance and other income but R&D expenses and slow revenue growth limited growth.
Revenue rose 8.7 percent to Rs 836.4 crore in quarter ended December 2015 compared to Rs 769.2 crore in year-ago period, driven by contract research business despite slow growth in biopharma and India branded formulations.
Bottomline matched analysts' estimates while revenue and operational performance missed expectations. Profit was estimated at Rs 105.5 crore on revenue of Rs 867 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
9:30 am World economy: European Central Bank boss Mario Draghi warned that downside risks were increasing again and more stimulus might be necessary, causing a sharp move in equity and currency markets. "It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in March," Draghi told a news conference, making it clear that things had changed since December as oil prices fell sharply. The euro fell 0.6 percent versus the dollar on his comments, breaking below the USD1.08 level. U.S. stocks also rallied sharply after his remarks, with Dow futures rising more than 115 points.
The market opened on a confident note Friday. The Sensex is up 218.34 points or 0.9 percent at 24180.55 and the Nifty is up 78.90 points or 1 percent at 7355.70. About 488 shares have advanced, 69 shares declined, and 24 shares are unchanged.
BHEL, Axis Bank, Axis Bank, ICICI Bank, Tata Steel and Hindalco are top gainers in the Sensex.
InterGlobe Aviation is down 6 percent while Idea slips 3 percent post December quarter results.
The Indian rupee recovered in the early trade post breaching 68 level in the yesterday's session.
It opened higher by 24 paise at 67.78 per dollar versus 68.02 Thursday.
Pramit Brahmbhatt of Veracity said, "A rebound in global as well as domestic equity market will help rupee gain. The range for the USD-INR is seen between 67.60-68.10/dollar levels today." The dollar index held above the 99 mark.
Asian stocks gained early, after the markets were given some breathing space when the European Central Bank hinted of more monetary policy easing, while crude oil extended an overnight rally.
Japan's Nikkei bounced 3 percent to move away from a 15-month low struck Thursday and Australian shares rose 0.9 percent.