Market ends at new 1-yr closing high; HDFC, Infosys, Reliance up

08 Aug 2016

3:30 pm Market closing: The market has ended at new 52-week high. The Nifty closed above 8700, for first time since April 16, 2015. The 50-share index was up 28 points at 8711. The Sensex was up 104 points at 28182.57.

HDFC, Infosys and Reliance were big contributors to index gains.

3:10 pm International markets: The global scenario in the last few weeks seems to have turned positive for equities the last few weeks with most central banks easing and now even more with the US non-payroll numbers coming in much better than expected.

Nick Parsons, Head of Markets Strategy of National Australia Bank said the jobs report was the best of all worlds for risk assets. There were enough jobs created to keep the hopes of keeping plenty of consumer demand alive but there wasn't much pressure on wages, which makes investors think of a potential US Fed rate hike coming. ''It was just what the markets needed,'' he said.

Most major central banks around the world are in the easing mode but US Fed will be the only one poised to hike rates.

2:55 pm Market Update: Equity benchmarks remained higher with the Sensex rising 126.14 points to 28204.49 and the Nifty climbing 36 points to 8719.15.

About 1559 shares advanced against 1160 declining shares on the BSE.

2:35 pm Earnings: Colgate Palmolive's first quarter (April-June) profit grew by 8.4 percent to Rs 125.7 crore from Rs 116 crore on yearly basis.

Revenue increased 12.4 percent to Rs 1,149 crore from Rs 1,022 crore YoY.

According to the average of estimates of analysts polled by CNBC-TV18, profit was estimated at Rs 142 crore on revenue of Rs 1,095 crore for the quarter.

Total volume growth stood at 6 percent, which came in ahead of estimates of 4-5 percent while domestic growth was at 5 percent percent.

Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) increased 3.7 percent to Rs 211.3 crore from Rs 204 crore but margin contracted by 150 basis points to 18.4 percent from 19.9 percent due to higher advertising expenses.

2:20 pm FII View: With the liquidity surge in emerging markets, benchmark Indian indices have gained close to 17-18 percent over last few months but Rahul Chadha of Mirae Asset Global Investments believes liquidity without fundamentals means the gains cannot be held for long.

In an interview to CNBC-TV18 Chadha says the market may not really be expecting anything in terms of a rate cut from the upcoming credit policy.

But, from a medium term perspective, the central government's productivity enhancement measures like goods and services tax (GST), dismantling of APMC Act, rural electrification etc mean consumer price inflation (CPI), which has been fairly sticky, goes down creating lot more room for easing of interest rates, he adds.

Similarly, rural economic recovery, jump in foreign direct investments etc. will act as enabling conditions that will bring back earnings growth to support valuations.

2:00 pm Market Check
Positive momentum continued for the second consecutive session today as the Sensex gained 90.98 points at 28169.33 and the Nifty was up 27.95 points at 8711.10 on heavyweights support.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent each as about 1539 shares advanced against 1099 declining shares on the exchange.

HDFC and Reliance Industries were the leading contributors to Sensex's gains, up 1.5 percent each. Hero Motocorp shares touched a record high of Rs 3,553.55 intraday, up 3.5 percent.

European stocks traded higher but investors remain cautious after weak Chinese trade data and consider if the latest US jobs numbers could trigger an interest rate hike by the Federal Reserve this year. France' CAC, Germany's DAX and Britain's FTSE gained 0.4-1 percent.

Oil prices rose on reports of renewed talks by some members of the Organization of the Petroleum Exporting Countries (OPEC) to restrain output. US West Texas Intermediate (WTI) crude futures were at USD 42.35 per barrel, up 55 cents from their last close. Brent futures were trading at USD 44.81 per barrel, up 54 cents.

1:45 pm Boardroom: Andhra Bank is likely to see another quarter of pain with slippages in the second quarter expected in the range of Rs 2,000-2,500 crore says MD & CEO Suresh Patel. However, Patel expects slippages to gradually decline from the third quarter onwards. The bank's slippages for the first quarter were at Rs 3,500 crore while for the two quarters preceding it, slippages were around Rs 2,500 crore each. Patel says large accounts particularly in the construction and iron and steel have been major contributors to these slippages. He says overall credit growth is impacted due to corporate book not picking up but it could grow roughly 13 percent over the coming quarters.
 
1:30 pm FII view: With the liquidity surge in emerging markets, benchmark Indian indices have gained close to 17-18 percent over last few months but Rahul Chadha of Mirae Asset Global Investments believes liquidity without fundamentals means the gains cannot be held for long.

In an interview to CNBC-TV18 Chadha says market may not really be expecting anything in terms of a rate cut from the upcoming credit policy.

But, from a medium term perspective, the central government's productivity enhancement measures like goods and services tax (GST), dismantling of APMC Act, rural electrification etc mean consumer price inflation (CPI), which has been fairly sticky, goes down creating lot more room for easing of interest rates, he adds.

The market continues its uptrend with the Nifty up 30.20 points or 0.3 percent at 8713.35. The Sensex is up 99.54 points or 0.3 percent at 28177.89. About 1504 shares have advanced, 1042 shares declined, and 137 shares are unchanged.

Hero MotoCorp is at record high after it posted better-than-expected Q1 results. BHEL, Lupin, Adani Ports and Reliance are other top gainers while Bharti Airtel, Sun Pharma, NTPC, Tata Steel and L&T are losers in the Sensex.

Gold hovered near one-week lows on Monday, after falling about 2 percent in the previous session, as a stronger-than-expected US jobs report likely increased the possibility of a rate hike this year by the Federal Reserve.

US employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth, and raising the probability of an interest rate increase this year.

12:59 pm Market Update: Equity benchmarks were marginally higher with the Sensex rising 80.42 points to 28158.77 and the Nifty gaining 24.30 points at 8707.45.

About 1491 shares advanced against 1030 declining shares on the BSE.

12:55 pm Earnings: Hero Motocorp's first quarter profit grew by 18.1 percent to Rs 883 crore from Rs 747.5 crore on yearly basis.

Revenue grew by 7.7 percent to Rs 8,011 crore from Rs 7,435.5 crore YoY.

Profit was estimated at Rs 867 crore on revenue of Rs 7,661 crore for the quarter, according to a CNBC-TV18 poll.

Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) increased 18 percent year-on-year to Rs 1,230 crore and margin has seen expansion of 135 basis points to 15.36 percent in the quarter ended June 2016.

12:45 pm Europe opens: European stocks opened slightly higher as investors remain cautious after weak Chinese trade data and consider if the latest US jobs numbers could trigger an interest rate hike by the Federal Reserve this year.

The pan-European STOXX 600 was up 0.08 percent.

Asian markets were broadly higher despite China's July exports falling 4.4 percent year-on year-on and imports declining 12.5 percent.

Sentiment was likely underpinned by a strong U.S. jobs report on Friday which showed the world's largest economy added 255,000, beating expectations and raising the chances that the Fed could raise interest rates this year.

12:35 pm FII View: Abhay Laijawala of Deutsche Bank says while India's domestic fundamentals continue to improve and sentiment on India's business environment perks up with the recent breakthrough on the GST, he does not think India will remain completely immune to a bout of global risk aversion.

He maintains a December 2016 Sensex target of 27,000.

12:15 pm Rate cut possible?" Reserve Bank Governor Raghuram Rajan is widely expected to hold the key interest rate in his last monetary policy review on Tuesday as retail inflation continues to be above the comfort zone.

Rajan, whose 3-year term will come to an end on September 4, may prefer that RBI assesses the full impact of monsoon rains before taking a view on the interest rate.

This is going to be the last bi-monthly monetary policy to be decided by the central bank Governor as the broad-based 6-member panel may take over the job before the next review on October 4.

In conjunction with naming its 3 members on the Monetary Policy Committee, the government is also likely to name a successor to Rajan sometime this month.

The government announced last week that it would like the RBI to focus on maintaining retail inflation rate of 4 percent for the next five years, based on which the new interest rate setting panel would take its monetary policy decisions going forward.

12:00 pm Market Check
Equity benchmarks traded marginally higher amid consolidation ahead of RBI monetary policy and after hitting fresh 52-week high on the Nifty.

The 30-share BSE Sensex gained 65.41 points at 28143.76 and the 50-share NSE Nifty rose 16.75 points to 8699.90. About 1456 shares advanced against 978 declining shares on the BSE.

Consistent inflow of foreign money has been driving the market higher since the beginning of March. FIIs have been net buyers for the six consecutive month, pumping in more than Rs 2,500 crore in August so far, in addition to Rs 46,158.76 crore worth of buying between March-July.

Hindalco Industries and BPCL surged more than 4 percent followed by Bosch, Lupin, Tata Motors (DVR), Reliance Industries, BHEL, HDFC and Dr Reddy's Labs with over a percent gains.

Bharti Airtel, Sun Pharma, NTPC, Tata Steel, L&T, Idea Cellular and Bharti Infratel were losers.

10:59 am Earnings: Bakery and dairy products manufacturer Britannia Industries said profit grew by 13.15 percent to Rs 219.13 crore in April-June quarter compared with Rs 193.66 crore in year-ago period. It was ahead of estimates and was driven by other income & better-than-expected operational performance.

Revenue matched analysts' estimates, rising 9 percent to Rs 2,196.6 crore on yearly basis.

Operating profit increased 9.7 percent year-on-year to Rs 316.2 crore and margin expanded by 10 basis points to 14.4 percent in the quarter ended June 2016.

10:35 am Poll: FMCG major Colgate Palmolive's first quarter (April-June) profit is seen rising 24.2 percent year-on-year to Rs 142 crore and revenue may increase 8.5 percent to Rs 1,095 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit (EBITDA - earnings before interest, tax, depreciation and amortisation) is likely to jump 12 percent to Rs 226 crore and margin may expand 60 basis points to 20.6 percent on yearly basis.

10:15 am Gold Update: Gold hovered near one-week lows, after falling about 2 percent in the previous session, as a stronger-than-expected US jobs report likely increased the possibility of a rate hike this year by the Federal Reserve.

US employment rose more than expected for the second month in a row in July and wages picked up, bolstering expectations of faster economic growth, and raising the probability of an interest rate increase this year.

Spot gold was nearly flat at USD 1,335.40 an ounce. It earlier touched its lowest since July 29 at 1,331.36.

US gold edged down 0.2 percent to USD 1,341.50 an ounce.

10:00 am Market Check
Equity benchmarks continued to consolidate with a positive bias after hitting a fresh 52-week high on the Nifty. The broader markets also traded in line with benchmarks, up 0.4 percent.

The 30-share BSE Sensex was up 122.11 points at 28200.46 and the 50-share NSE Nifty gained 31.80 points at 8714.95. The market breadth remained positive as about two shares declined for every share falling on the Bombay Stock Exchange.

Reliance Industries, HDFC, Infosys, HDFC Bank, Lupin and Tata Motors were top contributors to Sensex's gains.

L&T, Bharti Airtel, Asian Paints, NTPC and Sun Pharma were losers in early trade.

9:55 am Market outlook: Tim Condon, Head of Research-Asia, ING Bank says that although the US economy is not booming it is on a growth path and is likely to pave way for rate hikes from Federal Reserve.

However, the Fed rate hike is expected to come only in the first quarter of 2017 and not immediately because the global growth is still slow and in November there are elections in the US. He said Fed is the only central bank that would be hiking rates.

On the equity front, he said 2016 has been a good year so for financial assets in emerging markets except the month of January -- and is confident that these rallies will continue.

He said markets have now become complacent to the Fed rate hike news since they have been worried about it four years now.

9:45 am GST: After passing the Rajya Sabha hurdle, the Constitutional Amendment Bill for the introduction of Goods and Service Tax is set to be taken up in Lok Sabha.

GST, the biggest economic reform since 1991, is likely to sail through smoothly in the Lower House. It will replace a raft of different state and local taxes with a single unified value added tax system to turn the country into world's biggest single market.

Prime Minister Narendra Modi is likely to intervene during the debate on the Bill in Lok Sabha.

9:30 am Gas price cut for producers: Natural gas price paid to producers like state-owned Oil and Natural Gas Corp (ONGC) and Reliance Industries is likely to fall 20 percent to USD 2.45 in October.

This will be the fourth reduction in last 18 months following the formula approved by the government in October 2014.

Price of natural gas produced from existing fields of ONGC and RIL is likely to fall to USD 2.45 per million British thermal unit with effect from October 1 as opposed to USD 3.06 currently, a senior official said.

This rate is on gross calorific value (GCV) basis.

The market has opened higher on Monday. The Nifty has opened at new 52-week high with the 50-share index up 26.95 points or 0.3 percent at 8710.10 and the Sensex is up 113.53 points or 0.4 percent at 28191.88. About 409 shares have advanced, 101 shares declined, and 37 shares are unchanged.

Bajaj Auto, Axis Bank, Adani Ports, M&M and Maruti are top gainers while Infosys, GAIL, TCS and Bharti Airtel are losers in the Sensex. Wockhardt is down 12 percent.

The Indian rupee opened lower by 8 paise at 66.85 per dollar on Monday versus previous close 66.77. Dollar gained ground versus the yen amid the bigger-than-estimated increase in American payrolls.

Pramit Brahmbhatt of Veracity said, "We expect the rupee to trade with a positive bias as far as it trades above 67/dollar. It will get steam from positive domestic cues to head towards 66.50/dollar."

Asian shares rose on Monday and the dollar stood tall after a stronger-than-expected July jobs report lifted confidence in the strength of the US economy - heightening expectations that the US Federal Reserve could hike interest rates this year.

July nonfarm payrolls rose by 255,000 jobs and the June increase was revised upward to 292,000, the Labor Department said.