Nifty ends August series above 7950; BHEL tops buy list

03:30pm Market Closing
Equity benchmarks ended at new closing high on Thursday. The Sensex rose 77.96 points to 26638.11 led by capital goods, FMCG, oil & gas and private banks.

The Nifty closed above the 7950 on the expiry day for August derivative contracts, up 18.30 points at 7954.35.

The BSE Midcap index underperformed benchmarks, falling 0.3 percent. About 1385 shares have advanced, 1546 shares declined, and 116 shares are unchanged.

BHEL topped the buying list, up 4 percent followed by ITC, L&T, ICICI Bank, ONGC, Wipro, M&M, Dr Reddy's Labs and GAIL with 1-2 percent.

03:05pm Interview
The government notified the liberalised foreign direct investment (FDI) norms for the railway infrastructure in sectors such as dedicated freight corridors and high-speed train projects, allowing 100 percent FDI through automatic route in the sector.

LV Raju, MD of Kernex Microsystems believes FDI in rail and defence will encourage an investment of Rs 50,000 crore in the coming 2-3 years.

02:40pm GVK Power in demand
GVK Power (Goindwal Sahib), a subsidiary of GVK Power and Infrastructure, has got permission from the environment ministry to import coal from South Africa as a 'stop gap' arrangement in case the company fails to get coal from its captive mines in Tosikud North Sub-Block in Jharkhand, according to official sources. The stock gained 5 percent.

02:20pm Govt notifies new law empowering SEBI
The government has notified a new law empowering the capital market regulator to pass orders for attachment of properties, arrest of defaulters and to access call data records.

The Securities Laws Amendment Act, which was cleared by Parliament earlier this month and amends all legislations governing capital markets, would also facilitate setting up of a special Sebi court to fast-track the investigation and prosecution process, including by granting approval for search and seizure operations in suspected cases of frauds.

The Act, which has come into force through a gazette notification dated August 25, is part of the government and regulators' efforts to tighten the noose around fraudsters in the wake of several cases of illicit money-pooling activities including by ponzi operators in various parts of the country.

The new Act has as many as 57 clauses to amend various sections of the Sebi Act and two other related legislations, reports PTI.

02:00pm The 50-share NSE Nifty managed to hold the 7950 level in afternoon trade and is heading towards closing at new high on expiry day today. The index rose 19.20 points to 7955.25 while the Sensex gained 72.56 points at 26632.71.

Gautam Chhaochharia, Head of India Research at UBS Securities, who was among the first to set Nifty target of 8000 for 2014-end, said the 50-share index has the potential to overshoot the mark.

He sees a 15-16 percent earnings growth in the medium term (over the next 2 years).

Hero Motocorp, BPCL, ONGC and BHEL topped the buying list in Nifty 50, up 2-3 percent followed by IDFC, GAIL, Wipro, ICICI Bank, Tata Motors, Sesa Sterlite and Dr Reddy's Labs with 1-1.8 percent.

However, the selling pressure continued in Infosys, State Bank of India, Axis Bank, TCS, Sun Pharma, NTPC, Tata Steel, Tata Power and Hindalco Industries, which declined 0.5-1 percent.

Among midcaps, ESS DEE Aluminium shot up 17 percent followed by Balkrishna Industries, Linde India and GMDC with 5-6 percent whereas IOB, Prism Cement, PS IT Infra, Bhushan Steel and Havells India lost 4-5 percent.

01:25pm Interview
The Modi-led government has brought about a material sentimental turnaround in the country's business circles and abroad, says MS Unnikrishnan, managing director MD, Thermax.

Speaking to CNBC-TV18 on his views on the government's performance in the first 100 days, Unnikrishnan says there is now a strength of conviction in bureaucracy.

Unnikrishnan expects a revival to come in the fast moving consumer goods (FMCG), durables and autos soon and in that order itself.

''Commodities like steel, cement will pick up but in the second leg of revival,'' he adds.

Unnikrishnan hopes the government can address the land acquisition issue soon.

''Land is needed for everything. I do hope the bill is being amended, as was hinted by rural development minister Nitin Gadkari,'' he adds.

Among other issues, Unnikrishnan wants the government to address are more clearances in foreign direct investments and an easing of interest rates by addressing inflationary woes.

01:00pm The market remained steady in afternoon trade supported by private banks, capital goods, auto and oil & gas stocks. The Sensex advanced 61.87 points to 26622.02 and the Nifty rose 15.55 points to 7951.60.

The market breadth turned negative with the 1434 shares declined and 1270 shares advanced on the Bombay Stock Exchange.

PSU banks continued to see selling pressure with the top lenders State Bank of India, Punjab National Bank and Bank of Baroda falling 1-1.5 percent after sources say the Economic Offence Wing (EOW) Mumbai is probing role of public sector banks relating to the fixed deposit (FD) scam.

Reports indicated that there was a fraud on loan against the FD in the Malabar Hill branch of Dena Bank. The misappropriation of funds is to the tune Rs 180 crore. When investigated further, the Mumbai EOW found that this scam is spread across and other state-owned lenders are involved as well. It is likely that scam could more than Rs 800-1,000 crore.

Vijaya Bank, Indian Overseas Bank (IOB) and Dena Bank declined 3-5 percent after sources say EOW filed FIRs against employees of these banks.

Shares of BPCL, Asian Paints, ONGC, Hero Motocorp, GAIL, Wipro and Sesa Sterlite gained 1-2.5 percent while Tata Power, Axis Bank, Sun Pharma, Infosys, Jindal Steel, DLF, Bank of Baroda and PNB lost 0.8-3 percent.

12:55pm Sun Pharma, Ranbaxy under pressure
Drug makers Sun Pharma and Ranbaxy Laboratories fell around a percent after the Competition Commission of India (CCI) widened scrutiny of the multi-billion dollar merger deal.

Sun Pharma and Ranbaxy, which had announced a USD 4-billion deal in April this year, were asked by CCI on Wednesday to make public details of their proposed transaction in a "prescribed format" within 10 working days.

"The company has received direction vide letter dated August 27, 2014 under Section 29(2) of the Competition Act, 2002 from the Competition Commission of India (CCI) directing the company to publish the details of the proposed combination in the prescribed format within 10 working days from the date of the said letter of the CCI," Ranbaxy Labs said in a stock exchange filing this morning.

In a similar filing, Sun Pharma also informed the stock exchanges that they "are in receipt of direction under Section 29(2) of the Competition Act, 2002 from the CCI directing Sun Pharma to publish the details of the proposed combination within 10 working days from August 27, 2014 in Form IV contained in Schedule II to the Combination Regulations".

12:25pm SKS Microfinance on buyers' radar
Shares of SKS Microfinance surged 3 percent on hopes of strong growth in microfinance industry. Morgan Stanley says it is the top pick in NBFC space (along with IDFC) with a target price of Rs 385, implying a 33 percent upside from current levels.

The brokerage believes medium term growth and return on equity should drive price performance of the stock going forward. It says average return on equity at 23 percent in the best in Morgan Stanley coverage.

According to the note, India's microfinance industry holds USD 90 billion demand potential and only 15 percent is being addressed as of now. The brokerage house expects a 65 percent earnings per share compounded annual growth rate (CAGR) for FY14-17.

12:00pm Equity benchmarks remained in positive terrain in noon trade with the Sensex climbing 64.77 points to 26624.92 and the Nifty advancing 19.50 points to 7955.55.

However, the broader market underperformed benchmarks with the BSE Midcap index falling marginally and Smallcap index rising 0.2 percent. About 1230 shares have advanced, 1326 shares declined on the Bombay Stock Exchange.

Shares of Tata Motors, ICICI Bank, L&T, ONGC, HDFC, Sesa Sterlite, Reliance Industries, ITC and GAIL were top contributors to the Sensex, up 0.3-1.8 percent. However, Infosys, SBI, TCS, Sun Pharma, Cipla, NTPC, Tata Power and Tata Steel fell 0.4-1 percent.

Mumbai Economic Offences Wing has filed 10 FIRs against several private persons and public sector banks' employees, reports CNBC-TV18 quoting unnamed sources. Name of some employees of Dhanlaxmi Bank, Vijaya Bank, IOB and Dena Bank included in FIRs list. It is learnt that role of banks are being probed for fixed deposit scam.

11:55am Nitesh Estates in demand
Shares of Nitesh Estates rallied 10 percent on signing up joint development agreement for Rs 170 crore real estate project in Bangalore.

New residential project will have 262 residential units and is located at prime Hosur Main Road, Bangalore, said the company in its filing, adding the project will be launched shortly.

According to the real estate developer, the project will give total revenue of Rs 170 crore to the company and will contribute to the profitability over the 36 months.

11:35am Market Expert
Gautam Chhaochharia, Head of India Research at UBS Securities, who was among the first to set Nifty target of 8000 for 2014-end, said the 50-share index has the potential to overshoot the mark.

He sees a 15-16 percent earnings growth in the medium term (over the next 2 years).

In its India Strategy note, UBS maintains a bullish view on Indian markets, though sees a possibility of near-term consolidation. It said that lower risk-free rates may support overall higher market valuations, but growth outlook remains critical for re-rating.

11:00am Equity benchmarks continued to see buying interest with the Sensex rising 89.69 points to 26649.84 and the Nifty climbing 24.20 points to 7960.25. Advancing shares outnumbered declining ones by a ratio of 1278 to 1064 on the Bombay Stock Exchange.
 
According to CK Narayan, founder and CEO, Growth Avenues, the way the evidence is shaping up on the charts of the indices as well as prominent stocks most definitely confirms that good times ought to continue.

"Looking at market cycles at the current juncture (end August), we find that a cycles based analysis suggests that the market should continue the upward path at least over the next two months and it is more than likely that the much anticipated 8000 levels would soon become part of history!," he elaborates.

Shares of BPCL, Asian Paints, IDFC, Sesa Sterlite, GAIL, Tata Motors, BHEL, ICICI Bank, L&T and ONGC gained 1-2.7 percent whereas NTPC, Infosys, Tata Power, Cipla, SBI, Jindal Steel and Bank of Baroda lost 0.7-2 percent.

Realty major DLF fell more than 2 percent after the Supreme Court upheld the Competition Commission of India (CCI) order and asked company to deposit a penalty of Rs 630 crore imposed by CCI (in August 2011) within three months. UBS expects debt levels of the company to rise to Rs 20,000 crore by December 2014 versus Rs 19,000 crore in June.

Railway stocks like Texmaco Rail, Kalindee Rail, Titagarh Wagons, Stone India, BEML, Kernex Microsystems and Hind Rectifiers rallied 5-10 percent after the government notified the liberalised FDI norms for the railway infrastructure. The government permitted 100 percent foreign direct investment through automatic route in several areas, including high speed trains.

10:55am Railway stocks in demand
Investors lapped up shares of railway stocks after the government notified the liberalised FDI norms for the railway infrastructure. Texmaco Rail, Kalindee Rail, Titagarh Wagons, Stone India, BEML, Kernex Microsystems and Hind Rectifiers rallied 5-10 percent.

The government permitted 100 percent foreign direct investment through automatic route in several areas, including high speed trains.

Other segments of the railways in which FDI will be allowed include suburban corridor projects through public private partnership (PPP), dedicated freight lines, rolling stock including train sets, locomotives/coaches manufacturing and maintenance facilities, railway electrification, signalling systems, freight terminals, passenger terminals and infrastructure in industrial parks like railway line/sidings.

However, proposals involving FDI beyond 49 percent in sensitive areas, from security point of view, will be placed before the Cabinet Committee on Security (CCS) for approval by the railway ministry on a case-to-case basis, said a press note of the Department of Industrial Policy and Promotion (DIPP).

10:30am FII View
Bhuvnesh Singh, Barclays says returns of Indian equities have largely been driven by earnings growth over the past 15 years.

''In contrast to this long-term trend, this year has witnessed a 27 percent return of which 19 percent is due to multiples expansion. While this could be due to raised expectations on the back of change in India's political leadership, we believe that positive earnings momentum is required to sustain these returns,'' he adds.

10:00am The 30-share BSE Sensex touched a record high of 26674.38, up 92.74 points at 26652.89 supported by banking and financials, capital goods and oil & gas stocks. The 50-share NSE Nifty rose 25.25 points to 7961.30, which is few points away from all-time high.

The BSE Midcap and Smallcap indices gained 0.2 percent and 0.5 percent, respectively. About 1121 shares have advanced, 789 shares declined, and 62 shares are unchanged.

Top private sector lender ICICI Bank, commercial vehicle maker Tata Motors, engineering and construction major L&T, state-run GAIL and BHEL advanced over a percent. Shares of HDFC, HDFC Bank, ONGC, Reliance Industries, Wipro, HUL, Axis Bank and Bajaj Auto climbed 0.5-1 percent.

However, Infosys, SBI, Sun Pharma, Hindalco, Cipla, NTPC, Hero Motocorp and Tata Power declined 0.5-0.8 percent.
 
DLF lost another 2.6 percent (in addition to 4.6 percent loss in previous session) as the Supreme Court upheld the CCI order and directed the company to submit penalty of Rs 630 crore within 3 months. The total fine of Rs 800 crore, which includes penalty and interest amounts to 10 percent of its FY14 revenue. Morgan Stanley says imminent cash outflow will hurt DLF's already stretched balance sheet and the year end net debt target of Rs 18500-19000 crore will likely worsen.

09:40am FII View
Bharat Iyer, JPMorgan says with Indian equities rallying sharply over the last six months, the brokerage re-visit market valuations based on a range of parameters.

''Valuation models based on assets or long-term cash flows - price / book versus return on equity and dividend discount suggest a potential upside of 8-10 percent through to the end of the fiscal year,'' he adds.

09:15am Equity benchmarks extended gains on Thursday, the expiry day for August derivative contracts. The Sensex rose 66.62 points to 26626.77 and the Nifty climbed 19.80 points to 7955.85.

About 688 shares have advanced, 221 shares declined, and 31 shares are unchanged.

Shares of Larsen and Toubro, ICICI Bank, Axis Bank, Bharti Airtel, Bajaj Auto, Cairn India, BPCL and HCL Technologies gained 0.8-0.9 percent. However, Hero Motocorp, Hindalco Industries, Sun Pharma, Infosys, ONGC and TCS fell 0.2-0.7 percent.

The Indian rupee opened marginally higher at 60.39 per dollar on Thursday as against previous day's closing value of 60.45 a dollar.

The dollar softened a bit yesterday as traders focused on riskier currencies, while the battered euro continued to drift down amid speculation that the European Central Bank will resort to quantitative easing.

Mohan Shenoy of Kotak Mahindra Bank said, "As long as US economic data is mixed, currency markets will not expect US Fed to raise interest rates. Consequently, dollar strength against major global and EM currencies will only be gradual."

"In the absence of any fresh triggers rupee is expected to trade in a narrow range of 60.35-60.60/dollar today," he said.

Global markets remained unchanged after the record breaking rally. The S&P 500 held on to its 2000-mark and in Europe, the bigger story continues to unfold in the bond markets with the German 10-year yields down to a record low on hopes of quantitative easing by the ECB. Asian markets traded mixed due to lack of trigger.