Sensex tad below 27000, up 259 points; Nifty up 1% on F&O expiry

30 Jun 2016

3:30 pm Market Closing: Equity benchmarks extended rally further on Thursday, the NSE F&O expiry day. The Sensex was up 259.33 points or 0.97 percent at 26999.72 and the Nifty up 83.75 points or 1.02 percent at 8287.75. The broader markets also gained 1 percent.

About 1605 shares advanced against 1010 declining shares on the Bombay Stock Exchange.

TCS, Tata Motors, ICICI Bank, Axis Bank and HDFC Bank were top five contributors to Sensex's gains.

European markets rebounded after a weak start in early trade.

3:10 pm Big voice on Brexit: The Brexit vote was a negative shock but the tragedy no longer looks like a 'fait accompli,' George Soros said in a speech at the European Parliament on Thursday, as it has created "positive momentum for a stronger and better Europe".

He added that over four million people have petitioned Parliament to hold a second referendum. "By the time the Parliamentary debate on this petition takes place, it is not inconceivable that more people will have signed the petition than voted for Brexit," Soros said.

Soros further added that while the popular vote cannot be reversed, a signature collecting campaign could transform the political landscape for EU membership.

2:55 pm World Bank fund: Multi-lateral lender World Bank today announced funding support of USD 1 billion for expansion of solar power capacity in India.

It also signed an agreement with the International Solar Alliance (ISA), consisting of 121 countries led by India, to collaborate on increasing solar energy use across the world, with a goal of mobilising USD 1 trillion in investments by 2030.

The pact, which was signed in the presence of Finance Minister Arun Jaitley, Power Minister Piyush Goyal and visiting World Bank Group President Jim Yong Kim, establishes the multilateral lending agency as the financial partner for ISA.

2:45 pm Bank of Maharashtra's fundraising: Bank of Maharashtra is planning to raise Rs 1,000 crore for growth opportunities and has sought approval from shareholders for it.

The approval was sought at the bank's annual general meeting of shareholders held yesterday in Pune.

"The meet was held to seek shareholders consent to raise Rs 1,000 crore by way of FPO/ Rights issue/ QIPs etc to meet capital requirements as per RBI's Basel III norms to tap future growth opportunities," Bank of Maharashtra said in a release today.

2:25 pm Market Expert: India continues to be a part of the global rally, says Dilip Bhat of Prabhudas Liladhar. Even without adequate foreign investor support, buying and short covering was seen from domestic investors.

Nirmal Jain, Chairman of IIFL believes that India is in a bull market despite some dips. Underlying factors, in medium-term, are positive with monsoon playing out well and government initiatives.

''The market is trying to get into a higher orbit,'' says Jai Bala of cashthechaos.com. He expects Nifty to touch 8600-8700 in short to medium term.

Bank Nifty, in a 3 to 9 months frame, will hover in the range of 22,000-29,000.

2:20 pm Essar Oil in news: After stitching a deal to sell 49 percent stake in Essar Oil to Russia's Rosneft, the Ruia family is looking at selling another 25 percent stake in the company to an oil trader or a strategic investor like Saudi Aramco.

The sale of 74 percent stake (49 percent to Rosneft and 25 percent some other investor) will help bring down Group debt by half to about Rs 46,000 crore from current Rs 88,000 crore, sources said.

The promoters see an enterprise value of Essar Oil of USD 10 billion.

A preliminary deal for sale of 49 percent in Essar Oil to Rosneft was signed between the companies in July 2015. In March 2016, they signed a non-binding agreement. No valuation was provided for the deal at that time.

2:10 pm Quess IPO: The initial public offer of staffing firm Quess Corp has been oversubscribed 1.16 times till the afternoon trade on the second day of the 3-day bidding.

The IPO received bids for 82,07,820 shares against the total issue size of 70,96,774 shares, data available with the NSE till 1300 hrs showed.

Quess Corp has already raised Rs 180 crore from anchor investors.

Promoted by Ajit Isaac and Thomas Cook (India), Quess Corp's IPO has a price band of Rs 310-317 per equity share having a face value of Rs 10 each.

2:00 pm Market Check
The market extended rally in afternoon trade with the Nifty reclaiming 8300-mark ahead of expiry of June derivative contracts despite mixed trade in global peers.

The 30-share BSE Sensex rose 308.31 points or 1.15 percent to 27048.70 and the 50-share NSE Nifty rallied 96.60 points or 1.18 percent to 8300.60.

About two shares advanced for every share falling on the Bombay Stock Exchange.

Broadbased buying helped the market rally on expiry day. Bank, FMCG and auto stocks took the lead.

European stocks fluctuated, as a rebound seen in UK stocks following the Brexit vote lost steam and a renewed decline in oil prices capped gains in the market. Germany's DAX and Britain's FTSE were flat with a negative bias while France's CAC was higher.

1:55 pm New listing: Mahanagar Gas, the country's second largest CNG retailer, will list its equity shares on exchanges on July 1 after its issue received overwhelming response from investors last week. The issue, which opened during July 21-23, oversubscribed 64.54 times, driven by non-institutional investors (191.61 times) and qualified institutional buyers (72.84 times). Retail investors' participation in the issue was also good, their portion subscribed 6.82 times and employees 1.18 times. Mahanagar Gas has garnered Rs 1039.6 crore through the issue at higher end of price band of Rs 380-421 per share.

1:45 pm Market at new high: The Nifty has hit fresh high of 2016. The 50-share index is up 86 points or 1 percent at 8290. The Sensex is up 275.65 points or 1 percent at 27016.04.

BHEL, Axis Bank, NTPC, Tata Motors and Dr Reddy's Labs are top gainers.

1:30 pm Market outlook: While the margin of safety is low in equities right now, cashflows for companies are expected to become more stable in the next couple of years, says Kenneth Andrade, Founder & CIO of Old Bridge Capital Management.

Cashflows will improve on back of policy changes and not monsoon. Spread of credit is also expected to improve as more money will be in hands of people, he says.

Banks, which have recognized stressed assets, have value, but pricing them is difficult. Not many structural changes are happening and thus banks cannot be priced high.

The consumption story is looking strong with wage hikes across segments. Near-term valuations in consumer durables are rich, he says.

The Sensex is up 272.36 points or 1 percent at 27012.75, and the Nifty up 85.65 points or 1 percent at 8289.65. About 1572 shares have advanced, 885 shares declined, and 197 shares are unchanged.

BHEL, Tata Motors, NTPC, Axis Bank, Dr Reddy's Labs are top gainers while Sun Pharma is down.

Gold prices drifted lower by Rs 149 to Rs 31,166 per 10 grams in futures trade today as participants lightened their positions, largely in step with a weak trend overseas.

In futures trading, gold for delivery in August contract was trading Rs 149 or 0.48 percent down at Rs 31,166 per 10 grams at the Multi Commodity Exchange with a business turnover of 1,084 lots.

Analysts said a weakening trend in the overseas markets where gold declined on signs that policy makers will seek to minimize the impact on global growth from the UK's decision to leave the European Union, mainly weighed on the precious metal prices at futures trade here.

12:58 pm Market Update: The Sensex rose 152.53 points to 26892.92 and the Nifty gained 47.65 points at 8251.65. About 1515 shares have advanced against 890 declining shares on BSE.

12:45 pm Europe opens: European stocks came under pressure at open, as a rebound seen in UK stocks following the Brexit vote lost steam and a renewed decline in oil prices weighed on sentiment.

The pan-European STOXX 600 opened 0.5 percent down, with all sectors falling into negative territory.

London's FTSE index was off 0.3 percent around the open, while the UK's domestically focused FTSE 250 index was roughly flat. Meanwhile, the French CAC slipped 0.6 percent while the German DAX fell 0.4 percent.

Despite uncertainty over the UK and European Union's future relationship after the country voted last week to leave the bloc, markets in the region rallied on Tuesday and Wednesday, with the FTSE 100 reclaiming all of its post Brexit losses on Wednesday.

12:20 pm Gayatri Projects in news: Gayatri Projects today said it has bagged a Rs 306-crore order from the Centre for four-laning of a highway on the Andhra Pradesh-Tamil Nadu border.

"Gayatri Projects has secured a Rs 306 crore contract for the four-laning of a highway on the Andhra Pradesh-Tamil Nadu border from the Ministry of Road Transport and Highways," Gayatri Projects said in a BSE filing.

Giving details of the projects, the company said the projects is for rehabilitation and up gradation of NH-4 from km 133.36 to km 179.59 (Andhra Pradesh-Tamil Nadu border to Nalagampalli Village) to four-lane with paved shoulder in the state of Andhra Pradesh on engineering, procurement and construction (EPC) basis.

12:00 pm Market Check
The market lost half of its morning gains due to profit booking in HDFC Bank and Infosys. The Sensex gained 135.25 points at 26875.64 and the Nifty rose 41 points to 8245. Volatility is also gradually rising ahead of expiry of June derivative contracts.

The broader markets marginally outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7-0.8 percent. About two shares advanced for every share falling on the Bombay Stock Exchange.

Oil prices fell, with Brent futures struggling to defend USD 50 per barrel as fears over strike outages in Norway faded and as Nigeria's production improved. International Brent crude oil futures were trading at USD 50.16 per barrel, down 0.9 percent, from their last settlement. US West Texas Intermediate crude futures were down 0.84 percent at USD 49.46 a barrel.

11:45 am Rate cut? The process to set up India's monetary policy committee is ongoing and it is not clear if it will get to set interest rates at the central bank's next policy review on August 9, Reserve Bank of India (RBI) Governor Raghuram Rajan said according to TV channels.

India is in the midst of putting in place a six-member monetary policy committee that will be tasked with deciding interest rates.

11:30 am Houseview: Betting big on State Bank of India, Deutsche Bank says that it is the only PSU bank gaining market share with right basics, doing well in retail loans and becoming more efficient bank with right investments in digital. The brokerage has also raised target price on SBI by 13 percent to Rs 270 per share with a buy rating.

It says that SBI's business strategy focusing on net interest margin (NIM), fees and current and savings account ratio (CASA) are right on track. It is also confident that consolidation with its subsidiary may further improve efficiency.

Deutsche Bank believes that the worst of non-performing loan (NPL) recognition and credit costs are behind  while slippages at 2.7 percent and credit costs at 2.1 percent in FY16 should gradually improve. FY16 credit costs were at 220 basis points versus last six-year average of 120 bps. It expects gradual improvement in FY17 return on equity (RoEs).

The market continues to rise with support from auto, bank, FMCG amd pharma stocks. The Sensex is up 199.81 points or 0.7 percent at 26940.20, and the Nifty is up 56.30 points or 0.7 percent at 8260.30. About 1529 shares have advanced, 616 shares declined, and 156 shares are unchanged.

Tata Motors, BHEL, Axis Bank, ICICI Bank and NTPC are top gainers while HDFC and M&M are losers in the Sensex.

Oil prices fell as supply outlook improved with both commodities hovering close to the key USD 50 mark, worrying traders about producers coming back online.

Crude dipped after two days of strong gains which saw the commodity soar past the benchmark that makes financial sense for producers to restart production. Prices had been falling following the global financial market turmoil that followed last week's British vote to bolt out of the European Union.

10:50 am Buzzing: Alembic Pharmaceuticals shares rallied nearly 9 percent after the company did not receive by Form 483 observations for its Gujarat facility.

The company's active pharmaceutical ingredients (API) facilities - API I and API II - both located at Panelav in Gujarat have been successfully inspected by health regulator US Food and Drug Administration between June 20 and 29, 2016, says the Vadodara-based pharma company in its filing.

API contributed 16.5 percent to total sales of Alembic Pharma in FY16.

API business grew by 42 percent to Rs 524.9 crore in previous financial year YoY.

10:35 am CLSA on Tata Motors: CLSA sees four key near-term implications for Tata Motors post the Brexit vote.

"On the negative side, luxury auto demand in the UK/EU might weaken due to rising economic uncertainty whereas a weaker GBP against INR will result in translation losses while consolidating JLR," it says.

The brokerage also sees risk of JLR getting a lower valuation multiple on FY18 earnings given risk of import tariffs between the UK and EU beyond FY18.

On the positive side, JLR's average selling price and margin outlook improve materially due to a weak GBP, says CLSA. It cuts JLR's UK/EU volumes, but higher margins offset the impact and our FY17-18 EPS gets fine-tuned.

It retains buy with a target price of Rs 545.

10:15 am Gold Update: Gold fell after rising as much as 1 percent during the previous session, with safe-haven demand easing as the shock of Britain's decision to leave the European Union began to fade.

Gold futures were down 0.7 percent at USD 1,317.30 an ounce in international markets.

Atul Suri of Rare Enterprises is bullish on gold. He said, "After a great run-up it has a long correction. Gold is a defensive bet and a favourite among hedge fund managers." He has a target of USD 1,430-1,435 an ounce.

Silver, which climbed around 3 percent to reach a 1-1/2 year high on Wednesday, was nearly flat at USD 18.47 an ounce.

10:00 am Market Check
Equity benchmarks remained strong in morning trade with the Sensex inching towards 27000 level on global support.

The 30-share BSE Sensex rallied 250.87 points or 0.94 percent to 26991.26 and the 50-share NSE Nifty climbed 72.50 points or 0.88 percent to 8276.50.

The market breadth continued to be positive as more than three shares advanced for every share declining on Bombay Stock Exchange.

All Sensex 30 stocks are in green with the Tata Motors rising over 3 percent followed by ICICI Bank, Axis Bank, L&T, SBI, Dr Reddy's Labs, HUL and Lupin with 1-2 percent upside.

Asian markets traded higher, tracking rally in US and Europe in previous session. Nikkei gained 0.8 percent and Hang Seng rose 1.6 percent.

9:50 am Sugar mills: Sugar mills have paid Rs 48,675 crore to sugarcane farmers and owe about Rs 4,225 crore for the current marketing year ending September, the government said.

Of the total cane arrears, the maximum amount pertains to Uttar Pradesh at Rs 1,975 crore.

The cane price payable and arrears have been calculated on the basis of Fair and Remunerative Price (FRP), which is the minimum price, fixed by the Centre, to be paid to farmers. For the 2015-16 marketing year, FRP for sugarcane has been fixed at Rs 230 per quintal.

"During the current sugar Season 2015-16, about 230 million tonnes of sugarcane was procured from the farmers by the sugar mills across the country.

9:40 am Market check: The Sensex is up 221.86 points or 0.8 percent at 26962.25, and the Nifty up 62.55 points or 0.8 percent at 8266.55. About 1318 shares have advanced, 310 shares declined, and 67 shares are unchanged. BHEL, Tata Motors, NTPC, Hero MotoCorp and HUL are top gainers. GAIL is down.

9:30 am FII view: Surendra Goyal of Citi says he expects some surprises in earnings as companies started reporting Q1FY17, based on Indian Accounting Standards (Ind AS), although it is too early to figure out the quantum.

He feels some companies that may see negative Q1FY17 earnings are Zee Entertainment due to interest on redeemable preference shares, and Tech Mahindra, Eicher Motors & Info Edge due to ESOP (employee stock option) cost.

According to him, PSU earnings may benefit on reported employee costs & some corporates like Maruti Suzuki & Hero MotoCorp may gain due to higher interest income.

He remains constructive as better-than-expected Q4FY16 earnings (ex-financials) raises confidence in bottom-up forecast of 14 percent earnings growth in FY17.

The market has opened higher on June Future & Options expiry day. The Sensex is up 190.43 points or 0.7 percent at 26930.82, and the Nifty is up 58.30 points or 0.7 percent at 8262.30. About 447 shares have advanced, 62 shares declined, and 27 shares are unchanged.

Bharti, SBI, Dr Reddy's Labs, GAIL and BHEL are top gainers.

The Indian rupee opened higher by 13 paise at 67.55 per dollar versus 67.68 Wednesday.

Mohan Shenoi of Kotak Mahindra Bank said, "Consolidation is expected to continue in a choppy currency market. Rupee has recovered well post Brexit vote and has settled in a range."

Among global markets, Asia stocks rose, tracking an overnight rally on Wall Street, while the safe-haven Japanese yen retreated as global markets regained a semblance of calm after last week's Brexit shock.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent, pulling further away from a one-month low on Friday when it plunged more than 3 percent in reaction to Britain's decision to leave the European Union. Australian stocks added 0.3 percent and Japan's Nikkei climbed 1.2 percent.

Overnight, the Dow had risen 1.6 percent while Britain's FTSE rallied for the second day, retracing all the losses suffered in reaction to Brexit.

US President Barack Obama said he expects the world economy will be steady in the short run after Britain's decision but expressed concern about longer-term global growth.

The pound extended its advance from a three-decade low as traders took advantage of the global market rout to go on a buying spree.  Oil scored a second straight day of solid gains today as US crude inventories fell much more than expected and Brexit fears receded.

Oil prices advanced on easing worries about Britain's vote to leave the European Union and its impact on the global economy. The gains accelerated after the US Department of Energy reported the country's commercial crude inventories fell by 4.1 million barrels to 526.6 million barrels in the week ending June 24. The drop was about twice as large as expected.

Gold is trading around 1315 dollars an ounce on speculation central banks will have to continue supporting the global economy.