Nifty posts biggest weekly gain in 7 yrs, Sensex up for 4th day

04 Mar 2016

Bulls just managed to win the fight with bears on Friday as equity benchmarks closed marginally higher amid consolidation, continuing upside for fourth consecutive session. Banks, metals and select auto stocks along with positive global cues supported the market.

The 30-share BSE Sensex rose 39.49 points to 24646.48 and the 50-share NSE Nifty advanced 9.75 points to 7485.35 after hitting an intraday high of 7505.90. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1.1 percent and 0.75 percent, respectively.

Four-day gains (more than 7 percent) helped equity benchmarks post biggest weekly gains (6.4 percent) in absolute terms since May 2009, aided majorly by banks. The rally was supported by government's fiscal prudence in Union Budget, hopes of rate cut, new RBI capital rules and positive global cues. Bank Nifty surged more than 11 percent (in a week), the biggest weekly gain in absolute terms in 10 years.

Dipen Shah of Kotak Securities says going forward markets will watch out for rate cut in immediate term. Post that, quarterly results, monsoons, implementation of Budget proposals and reforms will be the important triggers for the markets, he feels.

Meanwhile, Election Commission announced polling dates for five states today, saying Assam elections will be held in two phases on April 4 & April 11. Kerala, Tamil Nadu and Puducherry polling will be held on May 16. West Bengal elections will take place in six phases, starting from April 4. Counting of all states will be done on May 19.

Major global markets were in positive terrain with the Europe trading half a percent higher. Asian markets like Hang Seng, Nikkei and Shanghai gained 0.3-1 percent at close. Brent crude was up 0.4 percent at USD 37.21 a barrel (at 16 hours IST).

Back home, banks took the lead among gainers today, up 1 percent. SBI rebounded sharply in late trade, up more than 3 percent, which was leading contributor to Sensex's gains. HDFC and HDFC Bank also bounced back, up 0.4-0.7 percent. Rival ICICI Bank gained 1 percent.

Tata Motors extended rally, rising 2 percent on top of 6 percent upside in previous session post strong JLR sales. Dr Reddy's Labs and ONGC also gained further, up 1.7 percent each.

State-run power equipment maker BHEL jumped 4 percent on commissioning of 700 MW thermal plant in Karnataka. Mahindra & Mahindra was up 0.2 percent as the company hiked vehicle prices by up to Rs 47,000 from April.

Among others, Coal India, Cipla and Bajaj Auto gained 1-3 percent while profit booking was seen in Sun Pharma, TCS, Reliance Industries, L&T, ITC, Maruti Suzuki, Bharti Airtel and Wipro, down 0.5-1 percent.

The market breadth was positive as about 1524 shares advanced against 1079 declining shares on Bombay Stock Exchange.

3:30 pm Market closing: In absolute terms, Bank Nifty posts biggest weekly gains in 10 years. The Sensex was up 39.49 points at 24646.48, and the Nifty was up 9.75 points at 7485.35.
About 1516 shares have advanced, 1087 shares declined, and 145 shares are unchanged.

BHEL, SBI, Coal India, Tata Motors and Cipla were top gainers while Sun Pharma, Wipro, Maruti, L&T and Reliance were losers in the Sensex

3:10 pm View on oil: Oil prices are likely to recover after 11-year low to USD 55 per barrel from the current USD 34 in 12 months, following gains in the latter half of 2016, according to a report.

However, weakness in the price of crude oil is likely to continue in the short-term, with the market yet to see the end of the downside momentum, according to a research report by UBS Wealth Management's Chief Investment Office (CIO).

The oil market is still oversupplied in the first half of 2016 after supply expanded 2.7 percent in 2015. Prevailing market surpluses require accelerated supply curbs to rebalance the oil markets.

2:50 pm Market Update: Equity benchmarks erased gains amid volatility. The Sensex fell 30.56 points to 24576.43 and the Nifty declined 15.35 points to 7460.25.

About 1454 shares advanced against 1055 declining shares on the BSE.

2:25 pm Sugar exports: Indian sugar mills signed export deals this week, the first in nearly two months, as an incentive by the top producing state Maharashtra and a rally in global prices of the sweetener made overseas sales attractive, industry sources told Reuters.

A pick up in exports by the world's second-biggest producer could put a lid on world sugar prices, which climbed to more than one-month highs on Thursday amid worries about lower shipments from top supplier Brazil.

Indian sugar export deals, absent earlier this year due to uncompetitive local prices, are trickling in now following a decision by Maharashtra to "exempt cane purchase tax for mills exporting their quota", said Sanjeev Babar, managing director of Maharashtra State Co-operative Sugar Factories Federation.

2:00 pm Market Check
The market gained strength again amid volatility in afternoon trade. The Sensex rose 74.34 points to 24681.33 and the Nifty advanced 22.30 points to 7497.90.

The broader markets maintained outperformance with the Midcap and Smallcap indices rising 1.2 percent and 0.8 percent, respectively. About 1475 shares advanced against 975 declining shares on the BSE.

Nifty Bank recovered more than 300 points from day's low as all banks stocks were in green. SBI (up over 3 percent) and HDFC Bank (up over 1 percent) rebounded. ICICI Bank extended upside, rising 2.5 percent.

Tata Motors, Dr Reddy's Labs, Cipla and Coal India rallied 2 percent each. BHEL jumped nearly 4 percent on commissioning of 700 MW thermal plant in Karnataka.

ITC, Sun Pharma, TCS, Maruti Suzuki, Wipro, Bharti Airtel and NTPC fell 0.7-1.4 percent.

1:30 pm Exclusive: Contrary to news reports, Coal India has not stopped production at any mine even though production has been cut back in the wake of low offtake, Coal Secretary Anil Swarup today confirmed to CNBC-TV18. In an exclusive interview, Swarup said the state-run mining monopoly is gradually increasing its production and added that he expects it to grow dispatch by 9-9.5 percent interview in FY16. He added that weak demand is likely to pick pick up in another three to four months.

The market is still flat, consolidtaing after a super rally in last two days. The Sensex is up 31.30 points or 0.1 percent at 24638.29, and the Nifty is up 3.10 points at 7478.70. About 1461 shares have advanced, 871 shares declined, and 130 shares are unchanged.

BHEL, ONGC, Tata Motors, Cipla and Dr Reddy's labs are top gainers while Sun Pharma, Wipro, Maruti, NTPC and Bharti are major losers in the Sensex.

Meanwhile, valuation of Indian equities have corrected and settled a little below 10-year mean levels of 15 times forward earnings -- something that makes stocks reasonable, if not cheap, says Bharat Iyer, Head of Equity Research, JPMorgan India.

In an interview with CNBC-TV18, Iyer said earnings had likely bottomed out and should perk up from the fourth quarter earnings.

"Earnings could grow 12-14 percent in FY17 and we won't be surprised to see rise by a similar amount," he said.

Iyer's recommended investment approach at this point is to be selectively overweight high quality financials, manufacturing sectors that cater to the government's investment drive (highways, railways, power transmission, defence etc) as well as IT services and healthcare.

12:59 pm Market Update: The market continued to be rangebound with the Sensex rising 27.45 points to 24634.44 and the Nifty climbing 5.30 points to 7480.90.

The market breadth remained positive as about 1463 shares advanced against 868 declining shares on the BSE.

12:30 pm Circuit filter revision: Shares of InterGlobe Aviation, Marksans Pharma, Dwarikesh Sugar, Shipping Corporation of India, Zicom Electronic among others rallied 2-18 percent today after exchanges announced revision in circuit filters.

The Bombay Stock Exchange on Thursday revised circuit filters of 346 stocks, which includes some midcap, smallcap and penny stocks.

Out of total, the exchange increased circuit from 5 percent to 10 percent for 159 stocks and from 10 percent to 20 percent for other 156 stocks while it reduced circuit for 14 stocks from 10 percent to 5 percent, for 3 stocks from 20 percent to 5 percent and another 3 stocks from 20 percent to 10 percent.

"Revised circuit filter will be effective from March 04, 2016," says the exchange, adding scrips in T, Z, P, MT, ZP and XT group will continue to attract a circuit filter of 5 percent or lower, as applicable.

12:00 pm Market Check
The market continued to be in tight range due to lack of domestic as well as global cues after rising more than 1,600 points rally in previous three consecutive sessions. The broader markets retained outperformance in noon trade with the BSE Midcap and Smallcap indices rising around a percent each.

The 30-share BSE Sensex advanced 37.24 points to 24644.23 and the 50-share NSE Nifty rose 5.20 points to 7480.80. About two shares advanced for every share declining on the Bombay Stock Exchange.

Vedanta extended its rally, up 7 percent in addition to 7 percent upside in previous session. Tata Motors too rallied further, up nearly 3 percent on top of 6 percent upside in previous day.

Shares of ICICI Bank, ONGC, Dr Reddy's Labs, Cipla, SBI, BHEL, Hindalco, Coal India and Tata Steel gained 1-4 percent while Sun Pharma, Maruti Suzuki and Wipro fell over 1 percent.

11:30 am FII View: Valuation of Indian equities have corrected and settled a little below 10-year mean levels of 15 times forward earnings -- something that makes stocks reasonable, if not cheap, says Bharat Iyer, Head of Equity Research, JPMorgan India. In an interview with CNBC-TV18, Iyer said earnings had likely bottomed out and should perk up from the fourth quarter earnings. "Earnings could grow 12-14 percent in FY17 and we won't be surprised to see rise by a similar amount," he said. Iyer's recommended investment approach at this point is to be selectively overweight high quality financials, manufacturing sectors that cater to the government's investment drive (highways, railways, power transmission, defence etc) as well as IT services and healthcare.

The market is absolutely flat as the Sensex is up 9.65 points at 24616.64 and the Nifty slips 1.95 points at 7473.65. About 1181 shares have advanced, 843 shares declined, and 106 shares are unchanged.

Dr Reddy's Labs, ONGC, Tata Motors, Cipla and BHEL are top gainers while Maruti, HDFC Bank, Adani Ports, Wipro and NTPC are losers.

Gold prices rose by Rs 149 to Rs 30,005 per 10 grams in futures trading today as speculators enlarged positions amid a firming trend overseas.

At the Multi Commodity Exchange, gold for delivery in far-month June was trading higher by Rs 149, or 0.50 percent, to Rs 30,005 per 10 grams, in a business turnover of seven lots.

Analysts said a firming trend in the global markets where gold rose 0.13 percent to USD 1,262.30 an ounce in Singapore, influenced gold futures.

10:40 am Interview: Contrary to news reports, Coal India has not stopped production at any mine even though production has been cut back in the wake of low offtake, Coal Secretary Anil Swarup today confirmed to CNBC-TV18.

In an exclusive interview, Swarup said the state-run mining monopoly is gradually increasing its production and added that he expects it to grow dispatch by 9-9.5 percent interview in FY16.

He added that weak demand is likely to pick pick up in another three to four months.

"[The central government's] UDAY scheme will play an important role in reviving demand for ailing power distribution companies," he said. "Once discoms undergo debt restructuring, their financial position is bound to improve."

The other positive is the govertment's promise of investments in infrastructure sector. This will help demand revival in cement and steel sectors, he said.

10:20 am Buzzing: Shares of Minda Industries gained nearly 11 percent intraday on acquisition of automobile lighting business of a company based in Spain.

"Minda Industries announced an acquisition of global lighting business of Spain-based Rinder Group that manufactures automotive lamps - head lamp, tail lamp and small lamp," says the Delhi-based automobile components manufacturer in its filing.

Enterprise value for total deal is around 20 million euro and this deal will be financed through internal accruals and debts.

"Acquisition includes 100 percent equity holding in Rinder India and Light Systems and Technical Centre, Spain along with 50 percent equity holding in Rinder Riducu, Colombia," the company says.

10:00 am Market Check
The market started consolidation after a rally in past three consecutive sessions. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap rising 0.7 percent and 0.3 percent, respectively.

The Sensex fell 7.74 points to 24599.25 and the Nifty declined 10.05 points to 7465.55.

HDFC Bank, HDFC, Sun Pharma, Adani Ports and Bharti Airtel declined more than 1 percent on profit booking while Tata Motors and ONGC continued their lead today as well, rising 3 percent each. ICICI Bank, Dr Reddy's Labs, Cipla and Coal India gained 1-2 percent.

HMT shot up 16.5 percent followed by Kaveri Seed, Eros International, Chennai Petroleum and Shipping Corporation with 5-13 percent upside while KPIT Technologies, Cox & Kings, IIFL Holdings, Hathway Cable and MphasiS were down 2-4 percent among midcaps.

9:55 am Market outlook: "There was the expectation in the market that with the Budget out of the way, a relief rally will emerge. The extent of it has surprised and the Nifty could go up till 7,700-7,750," Mukherjee told CNBC-TV18 in an interview.

But the bounceback is based on technicals rather than fundamentals, he said, adding that it would prudent for investors to raise cash levels a little instead of deploying more cash.

"You have to realize that even despite the 10 percent bounceback, we are back only at the levels at which we started February," he said.

At a fundamental level, the veteran financial commentator said he does not see major changes happening and said fourth quarter earnings will also likely be muted.

9:45 am Market cools off: The Sensex is down 51.48 points or 0.2 percent at 24555.51, and the Nifty slips 24.05 points or 0.3 percent at 7451.55. About 673 shares have advanced, 812 shares declined, and 62 shares are unchanged.

ONGC, Tata Motors, Cipla, ICICI Bank and ITC are top gainers while HDFC Bank, Maruti, SBI, Adani Ports and Bharti Airtel are losers in the Sensex.

9:30 am PSU banks meet: The second edition of Gyan Sangam, a retreat of heads of public sector financial institutions, will begin today against the backdrop of the government's strategy to favour consolidation among public sector banks. Earlier this week, Finance Minister Arun Jaitley, in the Budget 2016-17, said the government will unveil a road map for consolidation in public sector banks (PSBs). The two-day conference, to be attended by Jaitley, Minister of State for Finance Jayant Sinha, RBI Governor Raghuram Rajan, Financial Services Secretary Anjuly Chib Duggal and other senior finance ministry officials, will see discussion on mergers and acquisitions (M&As) in the banking sector, sources said.

After a bumper rally, the market has opened on a strong note Friday. The Sensex is up 71.36 points or 0.3 percent at 24678.35, and the Nifty up 29.80 points or 0.4 percent at 7505.40. About 385 shares have advanced, 110 shares declined, and 30 shares are unchanged.

ICICI Bank, Tata Motors, ONGC, L&T and BHEL are top gainers in the Sensex while GAIL, Adani Ports, Sun Pharma, Maruti and Hero are major losers.

The Indian rupee gained further in the early trade . It opened higher by 11 paise at 67.23 per dollar versus previous close 67.34.

Pramit Brahmbhatt of Veracity said, "We expect rupee to test 67.20/dollar levels. This may act as a technical hurdle and we expect some weakness post this level."

Dollar fell versus the euro after data showing a decline in US service sector employment added to worries over today's monthly US jobs data.

Asian shares look set to post a third straight weeks of gains on Friday as investors scaled back cautious bets on the global economy after a string of positive US economic data and a recovery in oil and commodity prices.

The rebound in risk asset prices could continue if the upcoming US employment report points to solid job gains, but not strong enough to encourage rate rises in the near term.