Sensex, Nifty soar 1%; GAIL & Tata Motors gain 6%, ITC weak

12 Aug 2014

03:30 pm Market closing
Bulls took charge of Dalal Street posting a stellar rally. The Sensex ended up 361.53 points or 1.4 percent at 25880.77. The Nifty closed above 7700, up 101.10 points or 1.3 percent at 7727.05. About 1529 shares have advanced, 1381 shares declined, and 125 shares are unchanged.

Both GAIL and Tata Motors were up 6 percent each.  HDFC, ONGC and NTPC were other major gainers in the Sensex. Among the losers were Bharti Airtel, Tata Power, Hero Motocorp, ITC and Maruti.

03:15 pm Sebi needs clarifications
Market regulator SEBI has sought clarifications on the proposed Rs. 750-crore initial public offer (IPO) of construction major HCC's realty arm Lavasa Corporation. Without disclosing the details of clarifications sought, SEBI has said ''clarifications (are) awaited from lead manager'' for the proposed public issue.

As per the latest weekly update to the processing status of draft offer documents filed with Securities and Exchange Board of India (SEBI), regulator has said clarifications were awaited on the proposed IPO of Lavasa as on August 8, 2014.

The status is updated on a weekly basis by the regulator and the next update of the status as on August 15, 2014, would be uploaded on the SEBI's website the next working day.

SEBI said that it might issue observations on Lavasa's IPO document within 30 days from the date of receipt of satisfactory reply from the lead merchant bankers to the clarification or additional information sought from them.

02:55pm Market update
Equity benchmarks extended upmove in last hour of trade with the Sensex rising 302.23 points or 1.18 percent to 25821.47 and the Nifty jumping 81.50 points or 1.07 percent to 7707.45 led by HDFC (up 4.7 percent), ICICI Bank (up 1.4 percent), HDFC Bank (up 1.6 percent) and Tata Motors (up 5.5 percent).

02:50pm Monsoon check
India has lowered its forecast for June-September monsoon rainfall to 87 percent of long-period average from 93 percent earlier due to a slow start to the season, the earth sciences minister said today.

Jitendra Singh said there was no scientific evidence of a drought this year and that the August-September monsoon rains were seen at 95 percent of the long-period average.

An average monsoon for the August-September period is when India receives downpours of between 96 percent and 104 percent of a 50-year average of 43.5 centimetres, the weather office classification shows, reports Reuters.

02:40pm BPCL surges 3%
State-controlled oil retailer Bharat Petroleum Corporation (BPCL) has reported an 8-fold increase in first quarter (April-June) net profit at Rs 1,216.3 crore led by higher other income and lower finance cost but impacted by higher tax expenses. Profit in the year-ago period was Rs 150.3 crore.

Subsidy sharing support from upstream companies and government helped the company report strong earnings during the quarter.

Net sales grew by 13.7 percent to Rs 66,750 crore in the quarter ended June 2014 from Rs 58,705 crore in corresponding quarter of last fiscal while other income jumped 3 times to Rs 1,023 crore from Rs 338 crore during the same period, which included forex gain of Rs 587 crore versus loss of Rs 944 crore Y-o-Y.

02:20pm Oil India Q1 beats street estimates
State-run oil and gas producer Oil India has reported a massive 40 percent growth in net profit at Rs 852 crore, strongly beating analysts' expectations, in April-June quarter compared to Rs 609 crore in the year-ago period driven by strong operational performance on account of higher crude and natural gas prices.

Analysts had expected the company to report net profit of Rs 775 crore on revenue of Rs 2,350 crore for the quarter, according to CNBC-TV18 poll estimates.

Net sales grew by 27 percent to Rs 2,515 crore in the quarter ended June 2014 from Rs 1,981 crore in the year-ago period.

Operating profit (EBITDA) jumped 60 percent year-on-year to Rs 1,116 crore and margin expanded by 900 basis points to 44 percent in the quarter gone by, which both were stronger than analysts' forecast of Rs 995 crore and 42 percent, respectively.

02:00pm The market continued to see buying interest in afternoon trade supported by private banking and financials, healthcare, power, and PSU oil and gas stocks along with Tata Motors.

The 30-share BSE Sensex jumped 155.33 points or 0.61 percent to 25674.57 and the 50-share NSE Nifty rose 39.20 points or 0.51 percent to 7665.15. About 1299 shares have advanced, 1403 shares declined, and 146 shares are unchanged.

Tata Motors retained its top position in the buying list, up 5.04 percent followed by GAIL, HDFC, ONGC, Sun Pharma and UltraTech Cement with 2-4.5 percent.

However, Bharti Airtel, Hindalco Industries, Mahindra and Mahindra, Hero Motocorp and ITC lost 0.9-1.7 percent.

Most active shares on the exchanges were Wockhardt, Tata Motors, Motherson Sumi, Force Motors, Tata Steel and HDFC.

In the midcap space, JK Cement, PTC India, Ramco Cements, Eicher Motors and BF Utilities surged 4-7 percent while Bhushan Steel, Sintex Industries, Indian Hotels, Jain Irrigation and GSFC fell 3-10 percent.

2:00 pm Gold check: Gold was trapped in a narrow range above USD 1,300 an ounce on Tuesday as equities gained ground, with investors appearing to set aside for now geopolitical worries concerning Ukraine.

"Gold will likely remain on the defensive given the current geopolitical backdrop, coupled with the fact that equity markets seem to be finding something of a bid," said INTL FCStone analyst Edward Meir.

A stronger dollar could also have some impact on prices, although geopolitical variables were likely to be more influential, Meir said.

Gold has gained about 9 percent this year, largely on tensions between the West and Russia over Ukraine, and violence in the Middle East. The metal is seen as an alternative investment to riskier assets such as equities.

1:40 pm Number crunching:  The broader contours of the June quarter earnings season are largely in line with the previous few quarters, says Dhananjay Sinha, head, institutional research, economist and strategist at Emkay Global Financial Services. This earnings season was led by sectors such as IT, pharma and other export-oriented companies that are doing well with respect to business growth, and year-on-year currency depreciation translating in earnings.

He was positively surprised by the numbers reported by some of the auto companies. He says while these companies were expected to do well, the numbers reported by some of the domestic auto companies like TVS beat expectations. Many of the FMCG stocks are also doing well and can provide buying opportunities, he adds.

Apart from these, Sinha says asset quality stress is still visible in the banking space.

1:20 pm Buzzing: Shares of IDBI Bank jumped 2 percent intraday as the company has made a statement that there will be no Central Bureau of Investigation (CBI) inquiry against a loan made by it to Kingfisher Airlines.

"The preliminary enquiry initiated by CBI a few months ago is against the borrower Kingfisher Airlines and not against IDBI Bank, as reported in the media. The bank has been providing all the information and documents sought by the agency in the matter and will continue to extend full assistance to the agency in the said enquiry,'' it said in statement to the exchange.

The state-run bank was under CBI scanner for disbursing loans to debt-laden Kingfisher Airlines, when the Vijay Mallya-led company had a negative net worth and negative credit rating.

The market is maintaining its uptrend with the Sensex up 149.79 points at 25669.03. The Nifty is up 38.10 points at 7664.05. About 1297 shares have advanced, 1320 shares declined, and 139 shares are unchanged.

Investors are keenly June Index of Industrial Production (IIP) and Consumer price index (CPI) of July. According to CNBC-TV18 poll, the June IIP is expected to come around 5.8 percent with an expectation of an upside toward 6 percent while July CPI is likely to see an uptick to 7.6 percent for July as compared to that 29 month low that it came in June which was 7.31 percent.

Tata Motors, GAIL, HDFC, ONGC and Tata Power are major gainers in the Sensex. Among the losers are Bharti Airtel, TCS, M&M and Hero.

Brent crude extended losses for a third straight session, dropping below USD 104 a barrel on Tuesday as fresh unrest on the streets of Baghdad was seen as posing little threat to the OPEC producer's oil output. Iraq on Monday named Haidar al-Abadi as the new prime minister to end the eight-year rule of Nuri al-Maliki, but Maliki has refused to go and deployed special forces to force a dangerous political showdown in Baghdad.

US President Barack Obama said the naming of Abadi was an important stride towards rebuffing Islamic State militants, who have overrun large swathes of northern Iraq.

12:55pm Interview
Having posted a steady set of earnings for the quarter ended June, PTC India is expecting almost 38 percent volumes coming from its long-term projects.

Speaking to CNBC-TV18, CMD Deepak Amitabh says the company has seen a 22 percent increase in its traded volumes for Q1. The total income of the company increased by 33.2 percent to Rs 3,690 crore versus Rs 2,770 crore in the past one year.

According to Amitabh, the supply of power to Bangladesh was constrained due to open access and so, the company could manage to supply only 70 percent power to the country in Q1FY15.

PTC India expects its Bhutan Plant to become operational in FY19

12:45pm Gold Check
Gold was trapped in a narrow range above USD 1,300 an ounce as equities gained ground, with investors appearing to set aside for now geopolitical worries concerning Ukraine.

Spot gold was steady at USD 1,308 an ounce by 0657 GMT, and was trading in a USD 4 range. US gold slipped about USD 1 to USD 1,309.20.

Asian shares edged higher tracking rallies in the United States and Europe.

Gold has gained about 9 percent this year, largely on tensions between the West and Russia over Ukraine, and violence in the Middle East. The metal is seen as an alternative investment to riskier assets such as equities, reports Reuters.

12:35pm Motherson Sumi on buyers' radar
Motherson Sumi Systems, the flagship company of Samvardhana Motherson, has reported a massive 124 percent growth in first quarter consolidated net profit at Rs 163.7 crore driven by strong operational performance despite exceptional expenses. Profit in the year-ago period was Rs 73.2 crore.

Net sales grew 18.3 percent to Rs 8,296 crore in the quarter ended June 2014 from Rs 7,013 crore in same quarter last year led by strong growth in exports as well as domestic business.

Consolidated operating profit (EBITDA) shot up by 65 percent year-on-year to Rs 632 crore and margin expanded by 210 basis points to 7.6 percent in April-June quarter.

12:20pm Britannia hits 52-week high
Bakery products manufacturer Britannia Industries has reported a 24.9 percent growth in its first quarter (April-June) standalone net profit at Rs 107.8 crore compared to Rs 86.3 crore in the year-ago period, driven by strong revenue and operating performance despite higher raw material cost.

Total income from operations grew by 15.4 percent to Rs 1,634.2 crore in the quarter ended June 2014 from Rs 1,416.3 crore in the year-ago period while raw material cost increased 23.4 percent to Rs 820.60 crore Y-o-Y, which as a percentage of sales slipped 170 basis points.

12:00pm Equity benchmarks maintained strong momentum in noon trade with the Sensex rising 152.90 points to 25672.14 and the Nifty gaining 39.15 points to 7665.10.

About 1306 shares have advanced, 1203 shares declined, and 133 shares are unchanged.

Coal India, Sun Pharma and Tata Power rallied more than 2 percent ahead of their first quarter earnings today while BHEL remained under pressure before its June quarter earnings announcement.

Tata Motors, the commercial vehicle maker and the owner of luxury car maker Jaguar Land Rover, maintained leading position in the buying list, up 6 percent post strong Q1 earnings. Credit Suisse increased earnings per share estimates by around 11 percent for FY15 and raised target price to Rs 510/share from Rs 480/share.

GAIL surged nearly 4 percent and HDFC shot up 3 percent. L&T, ONGC, NTPC, Cipla and Tata Steel climbed 1-2.7 percent. However, ITC, Infosys, TCS, Bharti Airtel, Mahindra and Mahindra, Reliance Industries, Hindalco, Hero Motocorp and SBI are under pressure.

11:55 am Market outlook: Jeff Chowdhry, Head for Emerging Markets Equities at F&C Asset Management, sees more money shifting to the Chinese stock market in the days ahead.

In an interview with CNBC-TV18, Chowdhry says he is bullish on Chinese equities at current levels. He says emerging markets in general will find it tough to trend higher because of the geopolitical risks weighing on global markets.

Chowdhry expects interest rates in the US to rise in the next 12 months.

On India, Chowdhry says the the recent Union Budget was a tad disappointing and that policy decisions will take time to come through. He is positive on the auto sector, and in particular on Tata Motors, which is expected to log strong JLR sales in US and China.

11:40 am Poll:  According to CNBC-TV18 poll, the June Index of Industrial Production (IIP) is expected to come around 5.8 percent with an expectation of an upside toward 6 percent. This time around IIP is expected to contribute quite handsomely to the Q1 GDP data considering that April-May saw positive IIP growth, which is expected to continue for June as well.

The core sector data for the month of June came in at a nine-month high, which too will be a positive contribution. Last month was the first month of IIP data, where it actually surpassed the core sector growth but that may not happen this time around because the core sector growth was good in terms of percentage growth.

As per the poll, the July CPI is expected to see an uptick to 7.6 percent for July as compared to that 29 month low that it came in June which was 7.31 percent. The key contributor for the CPI data will obviously be the vegetable prices. The mandi prices of key commodities like tomatoes, potatoes which are the key commodities have gone up 30 percent on a month-on-month basis, due to deficient rainfall and supply shortfall.

11:20 am Interview: Siddharth Lal, MD and CEO, Eicher Motors says despite the growth in net profit, commercial vehicle sales continues to be weak, though the pace of decline in sales is slowing down. However, he adds that the company has gained market share in 5-14 tonne CVs to 32 percent. Also, on the brighter side, the company saw exceptionally good performance in the bus segment.

''The bus segment is doing well, market share improved to 19 percent,'' says Lal. The company saw exceptional performance in exports in the June quarter. It grew 252 percent year-on-year.

Buying continues in the market as Nifty tries to test 7700. The 50-share index is up 43.15 points at 7669.10 while the Sensex is up 171.23 points at 25690.47. About 1323 shares have advanced, 932 shares declined, and 107 shares are unchanged.

Tata Motors is up 6 percent, while GAIL, ONGC, HDFC and Sun Pharma are top gainers in the Sensex. Among the losers are Bharti, M&M, BHEL, ITC and Infosys.

Asian shares nudged higher on Tuesday, tracking rallies in the United States and Europe as investors seemed to put aside geopolitical concerns, at least for the moment. The better mood came even though NATO chief Anders Fogh Rasmussen warned of a "high probability" that Russia, using the guise of a humanitarian mission, could intervene militarily in Ukraine.

Ukraine has also said that, contrary to Russian reports of de-escalating, Russia has massed 45,000 troops on its border. Investors also monitored Iraq, where the United States recently began air strikes targeting Islamic State fighters marching on the country's Kurdish capital.

10:50 am Buzzing: Bullish brokerages are hoping to make some more hefty profits in Tata Motors after its April-June quarter spectacular performance. The stock surged 8 percent intraday on Tuesday, in addition to a strong rally yesterday.

Driven by Jaguar Land Rover (JLR), its first quarter consolidated net profit rose more than three-fold (212.7 percent) to Rs 5,398 crore.

Maintaining a buy rating, Bank of America Merill Lynch has raised target by 14 percent and increased JLR profit estimates by 13 percent over FY15-16. It is also expecting
 recovery of Tata Motors' India business in second half of the year.

Barclays also retains overweight rating with an increased target of Rs 561. It adds that while levels of profitability are unlikely to be constant due to the product and geographical mix in Q1, it  reflects strong product franchise and JLR's ability to cut costs.

Citi maintains buy rating with a revised target of Rs 562 per share. It, however, believes that uncertainties on pricing in China could be a near-term overhang, given the continued chatter on the space. "The impact is priced in for now and the strong results and new upcoming launches should help gradually alleviate investor concerns," it elaborates.

Though Credit Suisse is neutral on Tata Motors, but has increased target price to Rs 510. While this was a good quarter, going forward, the brokerage thinks Tata Motors EBITDA growth will moderate on XE margins being lower than expected, ramping up of costs at engine plant and China JV and adverse forex impact as hedges wore off.

The market remained on strong footing in morning trade with the Sensex rising 189.57 points to 25708.81 and the Nifty advancing 48.75 points to 7674.70. The broader markets gained too; the BSE Midcap and Smallcap indices rose 0.5 percent and 0.7 percent, respectively.

Advancing shares outnumbered declining ones by a ratio of 1196 to 668 on the BSE.

Housing finance company HDFC and state-controlled oil & gas major ONGC gained more than 2 percent. Drug maker Sun Pharma climbed 2 percent ahead of Q1 earnings; analysts expect adjusted profit of the company to grow 13.2 percent to Rs 1405 crore year-on-year.

GAIL India rebounded with 2 percent gains after Nomura maintains buy with a price target of Rs 525/share, saying it is a top pick in oil & gas sector as the outlook remains good for all segments and the correction in the stock price is an opportunity to accumulate.

09:55am IIP data today
According to CNBC-TV18 poll, the June Index of Industrial Production (IIP) is expected to come around 5.8 percent with an expectation of an upside toward 6 percent.

This time around IIP is expected to contribute quite handsomely to the Q1 GDP data considering that April-May saw positive IIP growth, which is expected to continue for June as well.

The core sector data for the month of June came in at a nine-month high, which too will be a positive contribution. Last month was the first month of IIP data, where it actually surpassed the core sector growth but that may not happen this time around because the core sector growth was good in terms of percentage growth.

09:45am FII View
Jason Todd, CIMB said a benign external backdrop has allowed country-specific factors to dominate in H1 in India, Indonesia, Philippines and Thailand. "Stronger global growth and increasingly unattractive valuations will make this trade harder to play through year-end. This drives a near-term preference for China and Korea over India and Taiwan," he added.

CIMB cuts India rating from overweight to neutral.

09:30am Tata Steel in News
Tata Steel has signed a series of contracts with Subsea 7, one of the world's leading contractors in engineering, construction and subsea services to the offshore industry, to supply undersea pipes to four separate North Sea projects in the UK.

The four contracts, signed over the past year and worth an estimated 10 million pounds in total, will see the Indian steel giant supply in excess of 55 kms of pipe weighing more than 9,000 tonnes.

The pipes will be manufactured at the company's Hartlepool pipe mills in the UK, before being welded and coated at its offshore processing centre, also in Hartlepool, reports PTI.

09:15am Equity benchmarks started off Tuesday's trade on a strong note supported by banks, metals, oil & gas and auto stocks. The Sensex rose 183.95 points or 0.72 percent to 25703.19 and the Nifty advanced 45 points or 0.59 percent to 7670.95.

About 707 shares have advanced, 198 shares declined, and 34 shares are unchanged.

Tata Motors surged nearly 7 percent in early trade on strong earnings in Q1. Consolidated net profit shot up 213 percent to Rs 5,398 crore in the quarter ended June 2014 from Rs 1,726 crore in the year-ago period. Barclays retains overweight rating on the stock with an increased target price of Rs 561 apiece post earnings.

ONGC, HDFC, Sun Pharma (ahead of Q1 earnings), Coal India (ahead of earnings) and NTPC gained 1.6-2 percent whereas Bharti Airtel and BHEL (ahead of earnings) declined over a percent.

The Indian rupee was unchanged at 61.17 per dollar in opening trade on Tuesday compared to previous day's closing value.

Ashutosh Raina of HDFC Bank said, ''The geo political tensions appear to be waning resulting in some relief to the markets. But the risk-off sentiment still continues and strength of dollar against all the major and Emerging Market currencies continues. The dollar strength has resulted in the rupee breaching the 61/dollar figure," He expects a range of 60.50-61.50/dollar for the day.

"The market is expecting a good IIP and CPI number to be declared later today. The bond yields after the recent policy action from RBI appear to be stabilising in the 8.70-9 percent range," he said.

On the global front, Asian markets remained mixed in trade while US stocks closed higher for a second straight session in light volume trading as investors looked for signs of easing in geopolitical tensions.