Sensex up 245 points; ICICI Bank & Wipro soar 3%, ITC falls 2%

19 Dec 2014

03:30 pm Market close
The market ended with hefty gains. The Sensex is up 245.27 points or 0.9 percent at 27371.84 and the Nifty is up 65.90 points or 0.8 percent at 8225.20. About 1463 shares have advanced, 1436 shares declined, and 109 shares are unchanged.

ICICI Bank, Hindalco and Wipro were up 3 percent each. Among the losers were Bajaj Auto, HUL, ITC, Bharti Airtel and Cipla.

03:20 pm Govt's growth outlook
The government is committed to achieving its fiscal deficit target of 4.1 percent of gross domestic product for the current financial year, chief economic advisor Arvind Subramanian said.

A finance ministry report said earlier on Friday that India faces a "major challenge" in achieving its 2014-15 fiscal deficit aim of 4.1 percent.

Subramanian said the government will have to consider all measures including spending cuts to meet the target. The government faces a "major challenge" in achieving its 2014-15 fiscal deficit aim of 4.1 percent of gross domestic product, its lowest in seven years, the finance ministry said in a report.

The report, which was tabled in parliament, also said that a pick up in economic activity was needed to prevent any fiscal slippage in the year to March 2015. The deficit reached nearly 90 percent of the full-year target between April and October, the first seven months of the current fiscal year.

03:00pm Market Check
The Sensex jumped 316.59 points or 1.17 percent to 27443.16 and the Nifty rose 88.30 points or 1.08 percent to 8247.60.

About 1573 shares have advanced, 1221 shares declined, and 115 shares are unchanged on the BSE.

02:55pm Delta Corp rallies 6%
Delta Corp said it was open to explore options to liquidate its investment of 35.6 percent holding in Advani Hotels and Resorts (India). The company had also confirmed that there were no developments in relation to the same.

Company has now engaged Yes Bank as a merchant banker, to explore possibilities for the sale of the company's interest in Advani Hotels and Resorts.

02:40pm Dr Reddy's Labs in News
Dr Reddy's Laboratories closed the acquisition of Habitrol brand from Novartis Consumer Health Inc. following issuance of the proposed consent order from the US Federal Trade Commission (FTC) on November 26, 2014. The company had earlier entered into an asset purchase agreement with Novartis Consumer Health Inc. to acquire the title and rights of Habitrol brand and to market the product in the US market.

With this closure, the company has assumed responsibility for the product and will commence shipments of the product in the market shortly.

Habitrol is an over-the-counter nicotine replacement therapy transdermal patch.

02:20pm Is FY15 fiscal deficit target achievable?
India faces a "major challenge" in achieving its 2014/15 fiscal deficit aim of 4.1 percent of gross domestic product, its lowest in seven years, the finance ministry said in a report on Friday.

The report, which was tabled in parliament, also said that a pick up in economic activity was needed to prevent any fiscal slippage in the year to March 2015.

The deficit reached nearly 90 percent of the full-year target between April and October, the first seven months of the current fiscal year, reports Reuters.

02:00pm Market Check
Equity benchmarks maintained strong uptrend in afternoon trade following positive global cues. The Sensex jumped 289.37 points or 1.07 percent to 27415.94 and the Nifty rose 83.10 points or 1.02 percent to 8242.40 while European markets like CAC, DAX and FTSE gained over half a percent.

The market breadth remained positive. About 1618 shares have advanced and 1112 shares declined on the Bombay Stock Exchange. The BSE Midcap and Smallcap indices advanced 0.8 percent and 1 percent, respectively.
 
Geoffrey Dennis, Head of Global Emerging Market Strategy at UBS is bullish on India and says the recent correction should be viewed in the context of the global market turmoil.

He sees 2015 as being a challenging year for emerging markets as the Fed is likely to hike rates sometime in the middle of the year. Also, corporate earnings in most emerging markets were likely to be under pressure. On both counts India is expected to do much better as the economy is recovering, corporate earnings growth too is improving and the government is pushing through key reforms. That makes India the best bet in the emerging market space, Dennis says.

Shares of ICICI Bank and Reliance Industries were major contributors to the Sensex gains, up 2 percent each. Wipro, Hero Motocorp, Coal India, Sesa Sterlite, NTPC, Hindalco Industries and Tata Power gained 2-3 percent.

HDFC, Infosys, TCS, L&T, ONGC and Dr Reddy's Labs climbed over 1 percent whereas ITC, Bharti Airtel, HUL, Cipla and Sun Pharma were under pressure, falling 0.4-1.7 percent.

Monte Carlo Fashions was the most active stock today, down more than 10 percent on listing day. Management told CNBC-TV18 they expect revenue growth to be in the range of 15 percent in FY15.

Infosys, State Bank of India, Kotak Mahindra Bank, Oracle Financial, Reliance Industries and L&T were other most active shares on exchanges.

1:55 pm First day, bad show: Ludhiana-based woollen and cotton apparel manufacturer Monte Carlo Fashions listed on Friday at Rs 585 per share. Shares of Monte Carlo Fashions started trade with more than 9 percent loss on Friday, the first day of trade. The issue price was fixed at Rs 645 per share by the Ludhiana-based woollen and cotton apparel manufacturer.

Despite the relatively poor opening, especially when compared to other recent listings of Shemaroo Entertainment , Sharda Cropchems and Snowman Logistics, an optimistic Sandeep Jain, executive director of the company says listing opening price cannot be an indicator of the company's share price. A more appropriate gauge would be the closing price, he adds.

Jawahar Lal Oswal, chairman, Monte Carlo Fashions says next year revenues will probably be better than this year. He also adds that the company is scouting for potential acquisition targets. Jain, however, adds that the company has not shortlisted potential acquisition targets yet.

1:45 pm Outlook on India: India's economy is expected to grow at around 5.5 percent in the fiscal year to March 2015, the finance ministry said in a report tabled in Parliament on Friday. Discussing the mid-year economic review, Kiran Mazumdar Shaw, Chairperson and MD, Biocon said economic growth needs some urgent boost. Government must come out with short-term measures that will accelerate economic activity in the country.

Shaw said short-term measures are now the order of the day and though government is working towards passage of crucial bills like goods and services tax (GST), Companies Act and Insurance Bill, all these will fetch results only in the long-term.

''I am very optimistic about India's future,'' said Shaw, adding, there is lot to be unlocked in India which can be done only through urgent reforms by the government.

1:30 pm Buzzing: Shares of Jindal Poly Films and Jindal Photo rallied 10 and 20 percent respectively ahead of a board meeting to discuss and approve merger plans.

''Jindal Photo has informed that a meeting of the board of directors of the company will be held on December 29 to discuss and approve a scheme of arrangement between it and Jindal Poly Films,'' a company statement said.

The company also stated that trading window shall remain closed from December 19 to December 30 in respect of dealing in any transaction involving purchase or sale of the security of Jindal Photo.

The market is still holding up gains as the Sensex is up 333.26 points or 1 percent at 27459.83 and the Nifty is up 93.25 points or 1 percent at 8252.55. About 1621 shares have advanced, 981 shares declined, and 101 shares are unchanged.

Coal India, Reliance and Sesa Sterlite are up 3 percent. Wipro and ICICI Bank are top gainers in the Sensex. Among the losers are Bhati Airtel, HUL, ITC, Cipla and Sun Pharma.

Coal ministry released approach paper, seeking comments from public on rules for auctioning of coal mines. The government has also constituted a panel, which will meets on December 19, to discuss the draft rules. The Supreme Court scrapped all coal blocks allocated since 1993 after ruling the selective allocation process was arbitrary and illegal.

Gold prices rose by Rs 34, or 0.13 percent, to Rs 26,849 per 10 grams in futures trade today after participants created fresh positions taking cues from overseas markets. Analysts said fresh positions built-up by speculators inline overnight gains in overseas markets, where gold rebounds from two-week low on signs of rising physical demand, mainly led to a rise in gold futures.

12:59pm Market Update
The Sensex rallied 346.27 points or 1.28 percent to 27472.84 and the Nifty jumped 95.60 points or 1.17 percent to 8254.90 aided by private banking & financials, oil & gas, technology and capital goods stocks.

Advancing shares outnumbered declining ones by a ratio of 1621 to 978 on the Bombay Stock Exchange.

12:45pm Jindal Photo in News
Jindal Photo said a meeting of the board of directors of the company will be held on December 29, 2014, to discuss and approve a scheme of arrangement between the company and Jindal Poly Films.

As per the SEBI regulations, trading window will remain closed from December 19, 2014 to December 30, 2014 in respect of dealing in any transaction(s) involving purchase or sale of the security of Jindal Photo Limited, it added. Jindal Photo rallied 18 percent and Jindal Poly gained 6 percent.

12:25pm Is 6% growth possible in India in FY16?
India's GDP can grow in the 6 percent range next year, says Citigroup's global chief economist Willem Buiter, formerly member of the monetary policy committee of the UK and a highly acclaimed economist and central banker.

Claiming that the country is back on the reforms path, he adds: "India did better in 2014 than 2013 and I expect that this momentum will be maintained. We've got very sound monetary and exchange rate management. We've got better fiscal management than we had."

But the clamour for lowering interest rates is rising by the day. Buitler says it is always the case with political authorities – they want to eat the cookies before they have been baked properly. He feels Reserve Bank governor Raghuram Rajan must make sure that not just headline inflation, but the underlying inflation and trend inflation remains under control before taking a decision on rates.

Going ahead, there is also a possibility of currencies of emerging markets weakening, including the rupee, along with external inflationary pressures which at the moment are masked by weakness in commodity prices, especially oil, says Citigroup. "But as and when US exits from its zero rate policy, there will be downward pressure on the rupee as well," Buitler told CNBC-TV18. He believes the central bank will always be cautious with inflation targeting.

12:00pm Market Check
The market continued its pullback for the second day running today with the Sensex rising 313.62 points or 1.16 percent to 27440.19 and the Nifty climbing 90.30 points or 1.11 percent to 8249.60 supported by technology, metals, banks and oil stocks.

The broader indices also gained in line with benchmarks. About 1525 shares have advanced, 919 shares declined, and 90 shares are unchanged on the Bombay Stock Exchange.
 
The market has already garnered more than 35 percent returns this year, yet Jyotivardhan Jaipuria, head-Research, Bank of America Merrill Lynch is hopeful of positive returns in the coming year, though lower than 2014. He expects around 15 percent returns in 2015.

Going ahead, Jaipuria expects 25 percent earnings growth in FY17. He expects earnings to double over the next four years. However, Q3 earnings for FY15 may fall below expectation due to sluggish demand and inventory losses by sudden fall in crude prices.

In a mid-year economic review release, the government expects FY15 GDP growth at around 5.5 percent, saying interest rates are expected to remain unchanged till March quarter-end. "Budget deficit target is in-line with strong fiscal responsibility," said the report.

Technology stocks like TCS, Infosys and Wipro gained 1.5-2 percent, reacting to Accenture's strong Q1 numbers released last evening. The 10 percent revenue growth for Accenture was the highest in 11 quarters and the company upped their FY15 revenue growth guidance to 5-8 percent versus 4-7 percent earlier.

Mahindra & Mahindra, Hindalco Industries, ICICI Bank, Sesa Sterlite and Reliance Industries topped the buying list on Sensex, up more than 2 percent while Bharti Airtel fell more than 2 percent.

In the midcap space, Eros International, Punj Lloyd, Symphony, GSFC and Cox & Kings gained 7-10 percent while Hindustan National Glass, BF Utilities, Tilak Finance, GE Shipping and State Bank of Bikaner fell 3-6 percent.

Crompton Greaves gained more than a percent as the RBI allowed foreign institutional investors to invest up to 100 percent of the paid-up capital in the company. Tree House too gained over a percent after RBI allowed foreign institutional investors to invest up to 49 percent of the paid-up capital in the company.

It's a weak listing for Monte Carlo Fashions as the stock listed at Rs 585 per share much below its issue price of Rs 645 per share. Management told CNBC-TV18 they expect revenue growth to be in the range of 15 percent in FY15.

Asian markets except Shanghai extended previous day's rally taking positive cues from the robust rally in the US markets. Bank of Japan kept its key policy unchanged. Brent crude continued to trade sub 60 dollar per barrel.

11:55 am Interview: Currency devalution has been putting pressure on global steel prices, says Seshagiri Rao, Joint MD & Group CFO of JSW Steel , adding that domestic prices, which have corrected 5-6 percent in Q3, fell in line with international prices. He however feels stability is coming back and further corrections are unlikely. The company's current annual coking coal requirement stands at 7-8 million tonnes. Rao feels sourcing coking coal locally will reduce operational cost. He however, feels that the state of iron ore production is worrisome.

''There is hope that more production will come into operation, but nothing has been happening on the ground. This is leading to an increase in imports. This year around 10-15 million tonnes of iron ore has been imported, which is a matter of concern,'' he said.

11:45 am Accenture outlook: Consulting and outsourcing company Accenture Plc raised its revenue forecast for fiscal 2015 after contract wins helped the company post better-than-expected first-quarter earnings and revenue. The company said it expects revenue growth of 5-8 percent for the year ending August on a local currency basis, up from the 4-7 percent growth it had estimated earlier.

The company, however, cut its earnings forecast, citing a larger-than-expected impact from a strong dollar. Accenture, which gets about 56 percent of its revenue from outside North America, said it expects earnings USD 4.66-USD 4.80 per share for the period, down from its previous forecast of USD 4.74- USD 4.88.

The company's quarterly results were mainly driven by double-digit percentage growth in its communications, media and technology group and health and public services operation. Revenue in the outsourcing business rose 11.2 percent to USD 3.80 billion in US dollar terms, accounting for 48 percent of the company's total net revenue.

11:30 am Brent check: Oil prices edged up in Asia after falling sharply in the previous session, as analysts predicted increased volatility and no end in sight this year to tumbling prices. Crude prices have plunged roughly 50 percent since June owing to plentiful supplies, a stronger dollar and weak demand as the global economy struggles, analysts say. The Organisation of the Petroleum Exporting Countries (OPEC), the oil producers group that supplies about 40 percent of the world's crude oil, has so far declined to cut output to curb the price plunge.

The market is holding on its early gains. The Sensex is up 310.32 points or 1.1 percent at 27436.89 and the Nifty is up 87.85 points or 1 percent at 8247.15. About 1592 shares have advanced, 634 shares declined, and 66 shares are unchanged.

Sesa Sterlite, M&M, BHEL, Coal India and Hero MotoCorp are top gainers. Bharti Airtel, HUL, GAIL, ITC and Bajaj Auto are major losers in the Sensex.

According to Reuters, the government estimates FY15 GDP growth seen at around 5.5 percent.

Brian Kelleher, Morgan Stanley says India's BSE Sensex has fallen 6.2 percent as global risk aversion started to take hold from December 4, slightly lagging MSCI Asia Pacific ex-Japan.

"We acknowledge that India remains one of the best-performing markets globally in 2014, but given the strong reform momentum, we think this pause is a good opportunity to revisit some strong buying ideas," he adds.

10:55am Panacea Biotec rallies
Shares of Panacea Biotec rallied nearly 12 percent on strategic alliance with the US-based pharmaceutical firm.

"Panacea Biotec has entered into collaboration with Rising Pharmaceuticals Inc, one of industry's leading organizations involved in marketing and distribution of innovative branded and multi-source prescription and over-the-counter pharmaceutical products in USA," said the company in its filing to the exchange.

The collaboration established on December 17 for an oral controlled release product utilising Panacea's platform oral drug delivery technology, it added.

The dossier for the product is currently under review by Food and Drug Administration.

According to the signed agreement, Panacea will receive an upfront research fee on signing as well as a milestone payment on approval of the product by FDA.

"Upon commercialisation of the product (which has a market size of more than 300 million in the USA), both companies will share profits at a pre-agreed ratio," said Panacea.

Panacea will undertake product development and will manufacture & supply products while Rising Pharma will be responsible for sales and distribution of products in USA.

10:35am Brent below $60/bbl
Brent crude held below USD 60 a barrel near a 5-1/2-year low as a global oversupply of oil showed little sign of receding, even as companies cut upstream investments next year.

Oil prices were on track for a fourth straight week of declines after OPEC members last month decided against cutting production in response to a drop of nearly 50 percent in prices since late June.

Oil companies have been announcing cuts in exploration and capital spending as crude's price decline makes projects uneconomical.

10:20am Market Expert
The market has already garnered more than 35 percent returns this year, yet Jyotivardhan Jaipuria, head-Research, Bank of America Merrill Lynch is hopeful of positive returns in the coming year, though lower than 2014. He expects around 15 percent returns in 2015.

Speaking to CNBC-TV18, he says the government is likely to change its fiscal deficit target of 4.1 percent in its mid-year review of the economy on Friday .

According to him, the expenditure cut by finance minister Arun Jaitley signals a positive move and the first quarter of next year should see some big ticket divestments by the government.  

Going ahead, Jaipuria expects 25 percent earnings growth in FY17. He expects earnings to double over the next four years. However, Q3 earnings for FY15 may fall below expectation due to sluggish demand and inventory losses by sudden fall in crude prices.

10:00am Market Check
Equity benchmarks gained more strength in morning trade led by rally in heavyweights like Reliance Industries, Infosys, HDFC and ICICI Bank. The Sensex surged 325.86 points or 1.20 percent to 27452.43 and the Nifty rose 87.85 points or 1.08 percent to 8247.15.

The broader markets rallied too with the BSE Midcap and Smallcap indices rising 1.3 percent and 1.5 percent, respectively. About 1461 shares have advanced, 473 shares declined, and 60 shares are unchanged on the Bombay Stock Exchange.
 
Brian Kelleher, Morgan Stanley says India's BSE Sensex has fallen 6.2 percent as global risk aversion started to take hold from December 4, slightly lagging MSCI Asia Pacific ex-Japan.

"We acknowledge that India remains one of the best-performing markets globally in 2014, but given the strong reform momentum, we think this pause is a good opportunity to revisit some strong buying ideas," he adds.

Shares of ICICI Bank, Reliance Industries, Infosys, HDFC, L&T, TCS, HDFC Bank, Maruti Suzuki, Axis Bank, Wipro and Tata Motors gained 1-2 percent. M&M, Hero Motocorp, Sesa Sterlite and Coal India climbed over 2 percent while Bharti Airtel fell 1 percent.

Monte Carlo Fashions opened at Rs 584, down 9.5 percent compared to issue price of Rs 645 a share. It was trading down 3 percent at Rs 626.50.

9:55 am Time to take off: Tata-Singapore Airlines joint venture airline Vistara tonight announced the launch of its operations from January 9 with flight from Delhi to Mumbai and Ahmedabad.

The full-service airline, which is a 51:49 joint venture between Tata Sons and Singapore Airlines, opened its bookings at 22:30 hours tonight. With Delhi as its hub, Vistara will initially offer flights to Mumbai and Ahmedabad, the airline said in its statement late tonight.

Vistara will operate 148-seater Airbus A320-200 with 16 seats in business class, 36 in premium economy and 96 in economy. Phee Teik Yeoh, Chief Executive Officer, Vistara, said,"I am very excited as this day is the culmination of many months of hard work. "The activation of distribution channels is our first interface with our customer and with this, we embark on a journey to fulfil our brand promise of seamless travel experience. I would like to especially thank our partners for helping us put our best foot forward and most importantly the members of Vistara team for their diligence and resolve all this while."

9:40 am FII view: The global sell off is over for the time being and there could be a relief rally towards the end of this month, feels Geoffrey Dennis, Head of Global Emerging Market Strategy at UBS. He says the problems in Russia are unlikely to have a major impact on the global economy in 2015. Markets currently offer a good medium term buying opportunity, and while it is tough to call a bottom, Dennis says he would certainly not take a bearish view.

According to Dennis, Russia's debt to GDP ratio is not too high and it has a good buffer of forex reserves. Hence the probability of a sovereign default is minimal. However, some companies and banks in Russia could be in trouble and may have to be bailed out. Still this is unlikely to impact the global banking system. Dennis is bullish on India and says the recent correction should be viewed in the context of the global market turmoil. He sees 2015 as being a challenging year for emerging markets as the Fed is likely to hike rates sometime in the middle of the year.

9:22 am Market Check: The Sensex is up 208.90 points or 0.8 percent at 27335.47, and the Nifty is up 59.85 points or 0.7 percent at 8219.15. About 1017 shares have advanced, 183 shares declined, and 32 shares are unchanged.

The market has opened higher. The Sensex is up 166.08 points or 0.6 percent at 27292.65, and the Nifty up 51.00 points or 0.6 percent at 8210.30. About 686 shares have advanced, 94 shares declined, and 15 shares are unchanged.

Infosys, Wipro, BHEL, Axis Bank and Sesa Sterlite are top gainers in the Sensex. Among the losers are Bharti Airtel, ITC, HUL.

The Indian rupee gained further in early trade. The currency has opened at 63.05 a dollar, up 6 paise compared to previous day's closing value of 63.11 a dollar. Pramit Brahmbhatt, Veracity says the rupee is expected to trade weak as overnight, the dollar is trading strong which will keep rupee under pressure. ''The range for the day is seen between 62.70-63.50 a dollar,'' he adds.

S&P 500 index capping its best two-day gain in three years as global equities rallied on the Federal Reserve's pledge to be patient on boosting rates. In Europe, shares closed sharply higher with global sentiment boosted after the US Federal Reserve said it had confidence in the economy.

In Greece's first round of a snap presidential election, the prime minister's preferred candidate failed to gain 180 votes he needed to win. The second and third round of voting will take place before January 2015.

Asian stocks are higher following positive US lead. Nikkei is up 1.5 percent and is getting support from a weaker yen. Traders are also awaiting the Bank of Japan's last policy decision for the year. The central bank is widely expected to keep monetary settings unchanged
But reports suggest that freshly re-elected Prime Minister Shinzo Abe is planning a significant stimulus package to the tune of around USD 30 billion, which should help the Nikkei to extend gains today.

In commodities, Brent crude prices hold steady at below USD 60 per barrel. Meanwhile, Nymex crude jumps 2 percent to trade above USD 55. From precious metals space, gold gains over 2 percent after the US Federal Reserve said it would take a patient approach toward raising interest rates, lifting stock markets and commodities while dampening the dollar.