Rajan, oil price hike hope lift Sensex 1035 pts in 3 days

The market staged a smart performance in afternoon trade Friday with the equity benchmarks rising over 1.5 percent after seeing a consolidation in morning. Hopes of hike in fuel price and likely change in spectrum pricing were the drivers today

The Sensex was up 290.30 points to close at 19270.06, continuing its upward journey for the third consecutive session. The Nifty rallied 87.45 points to 5680.40.

Only Tuesday was the weak day for the market due to Syria tensions, but rest of week was extremely strong. Both benchmarks surged around 6 percent in three sessions and gained more than 3.5 percent this week, largely driven by slew of measures from new RBI governor Raghuram Rajan to revive the economy.

Experts believe the Nifty may cross 5700 with the current environment, but the rally is short-lived as the fundamental problems are not solved yet.

According to Ajay Bodke, head of investment strategy & advisory at Prabhudas Lilladher, the recent market rally seen on back of arrival of new RBI governor Raghuram Rajan and his ambitious agenda may be short-lived because from a medium-term perspective, we are not out of the woods yet.

Rupee's sharp depreciation from the past few months will be beneficial for exporters and BPOs and its impact will be seen in a few quarters, these are few positives for the market. But, long terms concerns on macros still remain, he told CNBC-TV18 in an interview.

Meanwhile, the rupee gained 380 paise to 65 against the US dollar today from its record low of 68.80 touched on August 28.

03:28pm Rupee gains further
Indian rupee gained 97 paise to 65.04 against the US dollar. The currency has been in a recovery mode after new RBI governor Raghuram Rajan announced slew of measures to revive economy, modernise Indian banking system and curb rupee depreciation.

It had touched a record low of 68.80 per dollar last week; after that it recovered 380 paise.

The Sensex is up 252.54 points or 1.33 percent at 19232.30, and the Nifty is up 87.45 points or 1.56 percent at 5680.40.

03:20pm Buzzer
Bharti Airtel shares gained 5.8 percent. Nomura has upgraded the stock to buy with a target price of Rs 360.

"The stock should react positively to improvements in operational key performance indicators, which we think can be sustained over the next 12 months. After 3 years of earnings cuts, the stock is finally seeing some upgrades. We have also raise FY14 and FY15 earnings per share estimates by 5-12 percent," Nomura said.

03:15pm Vodafone case

Bombay High Court says Vodafone petition has been dismissed.

Transfer pricing officer has jurisdiction on Vodafone transfer pricing case and can pass order without determining international status.

Dispute Resolution Panel has powers to determine if a transaction is international.

The market is trading at day's high ahead of likely decision on telecom and oil & gas space.

The Sensex is up 289.76 points or 1.53 percent at 19269.52, and the Nifty is up 88 points or 1.57 percent at 5680.95.

02:59pm Fuel supply agreements

The government today said Coal India (CIL) has so far entered into fuel supply pacts with about 140 power plants, amid the deadline for signing FSAs expiring last month, reports Reuters.

"So far around 140 fuel supply agreements (FSAs) have been signed," Coal secretary S K Srivastava told reporters on the sidelines of a function organised by CII.

According to Coal India Chairman, S Narsing Rao, some FSA's are yet to be signed because of certain issues concerning those power plants.

Coal india has to sign 173 FSAs for a capacity of 78,000 MW.

02:50pm Japan-India currency swap

Japan and India have decided to expand a bilateral currency swap facility to USD 50 billion from USD 15 billion, the two countries announced on Friday after bilateral talks on the sidelines of a Group of 20 summit, reports Reuters.

The expanded facility would boost the financial backing for the rupee, one of the emerging markets currencies that has been hit hard by the prospective scaling back of ultra-easy US monetary policies.

02:40pm Big surge
Top private sector lender ICICI Bank shares gained more than 7 percent on top of a 9 percent rally in previous session, aided by fresh long build-up and short covering.

Shares of country's largest telecom operator Bharti Airtel jumped nearly 7 percent on likely change in spectrum pricing.

ONGC rallied nearly 6 percent while Larsen & Toubro gained more than 4 percent followed by Cipla , BHEL and Jindal Steel spiked 3.6 percent each.

02:25pm Stocks In News
Sesa Goa recovered some ground after a 5.9 percent fall in early trade. Nearly 210 crore fresh shares hit the market today on the back of the ongoing Sesa-Sterlite merger process.

Stocks like UB Holdings and MMTC rallied 10 percent after the exchange revised circuit limit from 5 percent to 10 percent while Wockhardt , BGR Energy and Gitanjali Gem surged 4-11 percent after they shifted to the 20 percent circuit limit from 10 percent earlier.

The coal secretary says that the government is not ruling out buyback or special dividend option for Coal India. Company's board will take a decision on this soon. The chairman says that the company has about USD 200 million of debt on its books. The stock declined 2 percent on profit booking after rising 13.4 percent in previous five sessions.

02:10pm It is a strong session for the market, aided by rally in oil & gas and telecom stocks on hopes of further hike in fuel price and change specturm pricing.

The Sensex is up 265.23 points or 1.40 percent at 19244.99, and the Nifty is up 80.15 points or 1.43 percent at 5673.10. Advancing shares outnumbered declining ones by 1218 to 864 on the Bombay Stock Exchange.

Shares of telecom companies like Bharti Airtel (up 4.6 percent), Idea Cellular (up 3.2 percent) and Reliance Communications (up 3.4 percent) are in bull grip ahead of spectrum pricing meet at 2:30 pm today. According to CNBC-TV18 sources, the Telecom Regulatory Authority of India (TRAI) board meet will mull sharp cut in spectrum pricing.

It is learnt that 800 MHz and 900 MHz spectrum price may be cut by up to 75 percent and 800 MHz, 900 MHz spectrum price may be lower from 2008 3G price.

Meanwhile, the rupee appreciated by 70 paise to 65.31 against the US dollar.

The recently announced India-Japan currency swap is likely to give a much-needed boost to the Indian equity market, says Arvind Narayanan of DBS Bank.

The Indian and Japan government last year had announced the swap worth USD 15 billion, which was today enhanced to USD 30 billion today in the G-20 summit.

Narayanan adds that the Reserve Bank of India will now be looking at a level of 65-67 against the rupee for the next few weeks.

"These moves on the currency are probably short-termed euphoria of Dr Rajan's announcement. The market is slightly happier and confident about what is happening. But I do not think this is a sustainable change in trend because market would wait for FOMC on September 18," he adds.

Shares of PSU oil & gas companies are on fire today on hopes of diesel price hike soon. Experts believe the under-recoveries of oil marketing companies increased significantly in the recent times due to rupee depreciation and higher oil prices. BPCL , HPCL and IOC gained 1-2.5 percent while ONGC shares rallied nearly 5 percent.

12:59pm Oil & Gas on fire
Shares of PSU oil & gas companies are on fire today on hopes of diesel price hike soon. Experts believe the under-recoveries of oil marketing companies increased significantly in the recent times due to rupee depreciation and higher oil prices.

BPCL , HPCL and IOC gained 1-2.5 percent while ONGC shares rallied nearly 4 percent.

External affairs minister, Salman Khurshid says that it's essential to cut down the consumption of petroleum products and the move to market related prices is inevitable.

India Ratings & Research says, in its report, diesel and LPG prices could be increased in the coming days to control under-recoveries on petroleum products.

"The significant increase in under-recoveries in the past few months is likely to lead the government of India (GoI) to effect a one-time increase in the price of diesel and subsidised LPG cylinders," says Abhinav Goel, Senior Director of India Ratings & Research.

12:50pm Rupee Update
The rupee gained 50 paise to trade at 65.51 against the US dollar, continuing its recovery for the third consecutive session.

Ashutosh Raina of HSBC said recent RBI guidelines had helped soothe the nerves of a jittery market and also helped dollar-rupee recover considerably from its recent lows.

"The US jobs data to be released today should set the tone for timing and quantum of US Fed tapering. The tapering can result in immediate knee-jerk reaction in EM currencies," he adds.

Raina expects the rupee to trade in a broad range of 65 to 67/USD in the near-term."

12:40pm Market Update
The rally extended in afternoon trade as the rupee recovered further by 29 paise to 65.71 per dollar after rising 162 paise in previous two sessions.

The Sensex is up 242.84 points or 1.28 percent at 19222.60, and the Nifty is up 69.50 points or 1.24 percent at 5662.45.

12:30pm Leaders
ICICI Bank shares gained 5 percent on top of a 9 percent rally in previous session whereas its rival State Bank of India declined over one percent on profit taking.

Capital goods majors L&T and BHEL rallied 1.5-2 percent while technology stocks like Infosys and Wipro rebounded with 1.5-2 percent gains.

Cipla extended its upmove in afternoon trade, rising nearly 4 percent followed by Sun Pharma and Dr Reddys Labs with over 1 percent gains.

12:15pm Buzzer
Shares of Bharti Airtel   jumped 3 percent intraday Friday ahead of  spectrum pricing meet at 2:30 pm today. According to CNBC-TV18 sources, the Telecom Regulatory Authority of India (TRAI) board meet will mull sharp cut in spectrum pricing.

It is learnt that 800 MHz and 900 MHz spectrum price may be cut by up to 75 percent and 800 MHz, 900 MHz spectrum price may be lower from 2008 3G price.

Meanwhile, Nomura has upgraded Bharti Airtel to a buy with a target price of Rs 360. Nomura raises FY14/15f EPS by 5-12 percent.

12:05pm The market gained momentum in noon trade with the equity benchmarks rising one percent after seeing consolidation in morning part of the session. Technology, HDFC group, healthcare and capital goods stocks pushed the market higher.

The Sensex is up 213.12 points or 1.12 percent at 19192.88, and the Nifty is up 60.10 points or 1.07 percent at 5653.05.

Atul Badkar, VP (Institutional Equities), Derivatives Desk, Edelweiss Securities expects 5,675 to remain as a strong Nifty resistance today.

''We may play between 5,600 and 5,700 for few days but broadly this settlement should be in the trading range of 5,450 and 5,650,'' he says in an interview to CNBC-TV18.
11:55 am Macro: The oil minister will come up with some plans for lowering fuel consumption on September 16, Foreign Minister Salman Khurshid said, in a bid cut the country's import bill amid a sharp fall in the rupee.

"No matter what happens, we will have to cut down on fuel consumption," Khurshid said. "You can't keep subsiding costs of fuel and not restrict the use of the fuel."

Khurshid said increasingly people are realising the "inevitability" of moving away from government-controlled prices.

11:45 am Market levels: The Sensex adds 193 points or 1.02 percent at 19172.86, and the Nifty jumps above 5600, to 5649.05, up 56.10 points or 1 percent at About 1105 shares have advanced, 693 shares declined, and 129 shares are unchanged.

11:35 am Market outlook: Nikhil Vora, managing director and head- research at IDFC Securities feels it is a good time to cherry-pick stocks with strong fundamentals now as the economy may see benefits of policies in the long-run.

If foreign investors put their money in the market today, they could see a 5-10 percent appreciation in their portfolio in a year, he told CNBC-TV18. On sectoral expectations from the market, he says that the asset quality problems for banking are close to peaking out.

He is bullish on United Spirits and Pharma stocks like Dr Reddys Labs , Cipla , and Ipca Labs . In the telecom pack, he recommends investing in Bharti Airtel and Idea Cellular . For the IT sector, Infosys and other mid-tier stocks offer strong value, he says.

The market looks very stubborn today refusing to budge further in late morning trade as the Sensex is up 27.03 points or 0.14 percent at 19006.79 and the Nifty is at 5595.80 up 2.85 points or 0.05 percent.

Oil and gas, metals, auto, FMCG stocks are dragging the market. Among the losers, Coal India is down 4 percent while M&M loses 3 percent.

Asian markets are in wait and watch mode ahead of the US non farm payrolls data today.

There is not much movement in commodities. Brent was stable at USD 115 per barrel while gold was close to USD 1370 per ounce. The dollar index held firm at 7-week highs, with the euro trading at 1.31 and the yen has risen to 100/dollar.

Back home, the rupee is mostly range bound. Dealers say the currency's flat opening indicates lack of clarity on the direction. Government bond prices are steady ahead of the Rs 10,000 crore auction today.

10:59am Buzzer
Manappuram Finance shares gained nearly 3 percent after promoter released 2.1 crore shares from pledge.

VP Nandakumar holds 25.85 percent stake (21.74 crore shares) in the gold loan financing company as of June 2013. Out of which, he had pledged 4.4 crore shares or 20.27 percent of its stake.

10:50am Block deals
Zee Entertainment shares fell 2 percent. More than Rs 44 crore worth of equity shares changed hands on the National Stock Exchange.

Thermax gained 1.4 percent amid hefty volumes. More than 1.66 lakh equity shares (worth Rs 9 crore) exchanged hands at Rs 549 apiece.

Info Edge lost 3 percent. In a block deal , 2.4 lakh equity shares (worth Rs 7.22 crore) changed hands at Rs 301 apiece.

10:40am Midcap space
Engineers India , Jet Airways , Gitanjali Gems and Shipping Corporation rallied 5-8 percent whereas Pipavav Defence, Indian Infotech, India Cements , Tube Investment and Prestige Estate fell 2-5 percent.

10:30am Expert sees 5700 level on the Nifty

The Sensex gained 41.16 points at 19020.92, and the Nifty is up 2.15 points at 5595.10 amid choppy trade.

Atul Badkar, VP (Institutional Equities), Derivatives Desk, Edelweiss Securities expects 5,675 to remain as a strong Nifty resistance today.

''We may play between 5,600 and 5,700 for few days, but broadly this settlement should be in trading range of 5,450 and 5,650,'' he says in an interview to CNBC-TV18.

He believes if the market sustains 5,600 level and above, then the Nifty is likely to go 50 points more.

10:20am Gainers
ICICI Bank remained in bull grip on value buying and short covering, rising another 3.4 percent on top of previous day's 9 percent rally.

Technology stocks bounced back after previous day's sharp fall led by profit booking. Infosys and Wipro gained 2 percent each while TCS rose 0.35 percent.

Larsen & Toubro, Bharti Airtel and ONGC gained further followed by ITC and HDFC with 0.5 percent gains.

Healthcare majors too are seeing buying interest. Cipla , Dr Reddys Labs and Sun Pharma climbed 1-2 percent.

10:05am The market is rangebound in morning trade Friday as it seems to be a consolidation at current levels after rallying more than 400 points on the Sensex in previous session.

The Sensex is down 1.55 points at 18978.21, and the Nifty is down 9 points at 5583.95, but the broader markets outperformed benchmarks. Nearly two shares advanced for every share declining on the Bombay Stock Exchange.

Avadhoot Sabnis of CIMB says that the market is top-heavy in terms of performance and earnings trajectory, dominated as it is by the divergence between risk-off and risk-on sectors & optimistic assumptions for earnings growth.

Anticipating earnings downgrades, he cuts his Nifty target to 5,800, while maintaining neutral stance.

Meanwhile, the Indian rupee was down 20 paise to 66.21 against the US dollar after rising 162 paise in previous two sessions on measures taken by new RBI governor Raghuram Rajan to curb rupee volatility.

Shares of HDFC Bank and M&M declined 2.5 percent each on profit taking. Reliance Industries , State Bank of India and Hindustan Unilever lost over 1 percent.

Coal India shed 3.5 percent after rallying 13.4 percent in previous five consecutive sessions.

9:55 am Brokerages view: Morgan Stanley is overweight on Sesa Goa with a target of Rs 240. The firm says that the market is appreciating the value that Sterlite brings from the merger. "Other key positives for the company also include solid zinc assets, improved BALCO and power divisions and minority consolidation," it adds.

Macquarie has assigned an  underperform rating on UltraTech with a target of Rs 1,381. "Ultratech's plan to buy Jaypee Cements' plant may prove to be a drag in the near term and may lead to a 5 percent downgrade in the earnings per share (EPS)," it says.

9:45 am G20 update: Advanced economies led by the United States will increasingly drive global growth, with emerging countries at risk of slowing due to tighter US monetary policy, the International Monetary Fund said in a note prepared for the Group of 20 meeting in St. Petersburg, reports Reuters.

Emerging economies are seen particularly vulnerable to a tightening of US monetary policy, and the IMF recommended policy makers be ready to handle a rise in financial instability.

9:30 am Movers and losers: ICICI Bank , Wipro , Bharti are early gainers in the Sensex. Sesa Goa, HDFC twins and Coal India and SBI are top losers in the Sensex. Most of the indices are down today except technology and pharma. BSE Bankex which had a spectacular rally yesterday is down around 1 percent.

The market continues upmove for third day as the Sensex gains 105.60 points or 0.56 percent at 19085.36. The Nifty jumps to 5617.45 up 24.50 points or 0.44 percent. About 264 shares have advanced, 60 shares declined, and 15 shares are unchanged.

Indian rupee opened flat at 66 per dollar Friday as against previous day's close of 66.01 per dollar. In previous session the domestic currency had gained 106 paise on several measures announced the new RBI governor Raghuram Rajan.

Ashutosh Raina of HSBC said recent RBI guidelines had helped soothing the nerves of a jittery market and also helped dollar-rupee recover considerably from its recent lows.

"The US jobs data to be released today should set the tone for timing and quantum of US Fed tapering. The tapering can result in immediate knee-jerk reaction in EM currencies," he adds. Raina expects the rupee to trade in a broad range of 65 to 67/USD in the near-term.

Meanwhile in the global front, US markets eked out marginal gains on Thursday even as the yield on the 10-year treasury yields briefly topped 3 percent for the first time in two years while investors awaited the monthly jobs data to understand timeline of Fed tapering. European markets closed higher as ECB and BOE left key rates unchanged at record lows .

Crude prices recovered some ground as the energy information agency reported that stockpiles fell by 1.8 million barrels, a rate far quicker than analysts' estimates.

From precious metals space, gold prices sank almost 2 percent to two-week lows of USD 1368/oz as upbeat US economic data heightened expectations the US Federal reserve may soon rein in its massive stimulus program that has bolstered bullion prices.