Sensex ends up 256 points; Re strong, Infy & ICICI Bank up 5%

11 Oct 2013

3:50 pm Market closing: After a blockbuster rally, the Sensex ended at 255.68 points or 1.26 percent at 20528.59, and the Nifty up 75.25 points or 1.25 percent at 6096.20. About 1322 shares have advanced, 1111 shares declined, and 159 shares are unchanged. It's been a stellar Run for Dalal Street this week.

The Nifty and Sensex added more than 3 percent during the week. Sectorally, banks have been the best performers. Bank Nifty has added 4 percent this week. 3:35 pm Results impact: Shares of Infosys closes at highest level since April 2011.

The stock ended at Rs 3,277.50, up Rs 153.35, or 4.91 percent on the BSE. 3:30 pm Commodity expert: T Gnanasekar of Commtrendz Research says the best strategy to play gold right now would be to sell on any rallies from hereon with a possible target of close to Rs 28,000-27,500 per 10gm in the very short-term. About crude he explains, "It would be purely a retracement, but then for an intraday, and possibly for the short-term, it is better to be on the buying side.

I would prefer buying on dips to Rs 6,270-6,275 per barrel levels with a target of Rs 6,400 per barrel." 3:20 pm Alert: Nifty hits 6100, while the rupee is strong at 61.01 per dollar.

It has been a spectacular rally fuelled by Infosys September quarter earnings. The Sensex is up 233.64 points or 1.15 percent at 20506.55, and the Nifty up 69.55 points or 1.16 percent at 6090.50. About 1258 shares have advanced, 1088 shares declined, and 151 shares are unchanged. Banks are the outperformer today, with the Bank Nifty rising 2.5 percent. ICICI bank is the top gainer in the Nifty.

Vibhav Kapoor, IL&FS says, ''We've seen always for the last four reporting seasons that the market tends to go up initially when the results season start and then they fall after that. He adds that the market is entering the resistance zone of 6,100-6,200 so it may consolidate here. Meanwhile, Gruh Finance's second quarter (July-September) net profit increased to Rs 34.4 crore from Rs 27.2 crore year-on-year while total income jumped to Rs 210.5 crore from Rs 157 crore during the same period.

Net interest income of the housing finance company rose marginally to Rs 57.60 crore in the quarter gone by from Rs 57 crore in a year ago period.

The divestment roadshows of Coal India will start on October 21 and the 10-day roadshows will end on October 31, reports CNBC-TV18 quoting sources. It is learnt that roadshows will begin in Boston, New York, Chicago, San Francisco and London. Post Q2 results, roadshows will be in Singapore and Hong Kong, sources say.

According to sources, the government is planning to divest 5 percent in Coal India and expects to raise Rs 9,000 crore via divestment in the world's largest coal producer. It is learnt that Coal India issue is expected to be in December.

Gruh Finance's second quarter (July-September) net profit increased to Rs 34.4 crore from Rs 27.2 crore year-on-year while total income jumped to Rs 210.5 crore from Rs 157 crore during the same period. Net interest income of the housing finance company rose marginally to Rs 57.60 crore in the quarter gone by from Rs 57 crore in a year ago period. 02:24pm The market maintained its strong momentum in last hour of trade with both the equity benchmarks gaining one percent, aided by Infosys , ICICI Bank , L&T and Tata Motors .

These stocks rallied between 4-4.5 percent. The Sensex is up 219.77 points at 20492.68, and the Nifty is up 66.20 points at 6087.15. Technology, capital goods and banks are the major gainers in trade today with the IT, Capital Goods and Bank indices rising 2.7 percent each. Market valuations do not appear cheap at current levels, nor will there be a runaway rally going forward, says Dilip Bhat, joint managing director, Prabhudas Lilladher. He feels Nifty can at best reach 6200-6300, if at all there is a gush of FII flow again.

The market will largely remain volatile and may see a level of 5500-5600 over the next three-six months, he says. Earlier in the day, Infosys announced its second quarter results wherein it revised its full year revenue guidance to 9-10 percent from 6-10 percent. Bhat believes the company will exceed the FY14 guidance rather comfortably. He thinks the pick up in volume growth will be the next catalyst for the Infosys stock price.

The stock surged 4.5 percent. Meanwhile, Ranbaxy 's US facility Ohm Laboratories has got manufacturing clearance from the US Food and Drug Administration, or USFDA. Bhat feels Ranbaxy looks reasonably priced at current levels. The stock gained 2.5 percent.

2:00 pm Gold update: Gold prices continued their slide in futures trade for the second straight session, falling further by 0.40 per cent to Rs 28,540 per 10 gram, as speculators indulged in reducing exposures. Market analysts attributed the fall to a weak overseas trend as US lawmakers continued negotiations about increasing the debt limit and ending the partial government shutdown.

1:55 pm Update: For divesting, 5 percent stake in Coal India , the governemnt will kickstart a 10-day long roadshow beginning October 21. These roadshows will be held in Boston, New York, Chicago, San Francisco and London. The public sector giant will be announcing its second quarter results, following which the second leg of roadshow will be held in Singapore and Hong Kong. Sources had hinted earlier this week that it would be done by way of follow-on public offer (FPO).

1:45 pm Brokerage call on Infosys : TCS continues to remain Angel's top IT bet follwed by HCL Tech . Infosys is their third best pick and Ankita Somani of Angel Broking suggests accumulating the stock with a target price of around Rs 3,500. Post Infosys second quarter numbers, Angel Broking has revised the company's FY14 revenue growth to 11-11.5 percent from 9-9.5 percent earlier. In an interview to CNBC-TV18, Somani said its FY15 EPS can go up to Rs 216, which is a 3-4 percent jump from the earlier estimate of Rs 206-207.

1:35 pm Rupee outlook: HSBC has cut its USD/INR forecast for the end of the year to 62 from 65 previously, citing improvements in the current account deficit and measures to attract inflows. HSBC notes the rupee to benefit from any inclusion of local government bonds in the JP Morgan government bond index for emerging markets, and also cites the USD 1 billion rupee-linked bond issuance launched by World Bank's private sector arm International Finance Corp.

The market continued its rally in afternoon boosted by Infosys September quarter results and buying in banks, realty and autos. The Sensex is up 222.77 points or 1.10 percent at 20495.68, and the Nifty up 63.75 points or 1.06 percent at 6084.70. About 1240 shares have advanced, 995 shares declined, and 151 shares are unchanged. ICICI Bank , Infosys, L&T, Tata Motors and Maruti Suzuki are top gainers in the Sensex. Among the top losers are Tata Power , Coal India, Sesa Sterlite and Sun Pharma .

Tata Motors is up 3 percent as JLR sales have been surprising continuously. In September, the company saw a global retail volumes of 43,000 units, up a strong 17 percent year-on-year. On the global front, European markets opened higher following rally in US and Asian markets on hopes of likely deal to open US government and avoid debt default.

The market stayed higher in afternoon trade with the Sensex rising 161.89 points to 20434.80, and the Nifty gaining 50.05 points to 6071, supported by Infosys and ICICI Bank (both up 4 percent each). Shares of Larsen & Toubro and Tata Motors rallied 3 percent each. On the global front, European markets opened higher following rally in US and Asian markets on hopes of likely deal to open US government and avoid debt default.

Ranbaxy Labs shares gained 3 percent as its Ohm Labs received the establishment inspection report from the USFDA. The report signals sucessful resolution of manufacturing issues highlighted by the USFDA. A big relief for the company as Ohm is currently the only facility which have an approval from USFDA.

Ashok Leyland jumped 3 percent today on top of a 4.4 percent rally in previous session after another big block deal of 1 percent in early trade. Hinduja Automotive bought 2.6 crore shares of the company at Rs 15.8 per share on Thursday via a block deal. NCC rallied 12 percent on a media report that Singapore-based Sembcorp is likely to acquire majority stake in NCC Power for Rs 500 crore. NCC's current market cap stands at Rs 565 crore. NCC Power is jointly promoted by NCC and Gayatri Projects (up 1.24 percent).

Infosys is the top gainer in the Sensex, rising 4.5 percent after delivering a beat on revenues in the second quarter. Revenues in dollar terms rose 3.76 percent sequentially while rupee revenue jumped over 15 percent.

The company has revised its FY14 dollar revenue guidance to 9-10 percent from 6-10 percent earlier, though its EBIT margin was flat at 23.6 percent during the quarter. CEO and Managing Director S D Shibulal said that the focus will be on investments and not margins over the next two quarters. Barclays is overweight on the stock post results and set a target price of Rs 3,310 apiece. Infosys' strong dollar revenue growth is significantly above expectations, says Barclays in its report. "The company will run on twin engines of revenue strength and improving margins," the report adds.

12:27pm It is a strong session on the Dalal Street with the Sensex surpassing 20500 level as Infosys surprised positively with its second quarter results. The Sensex is up 231.06 points or 1.14 percent at 20503.97, and the Nifty is up 68.25 points or 1.13 percent at 6089.20. Vibhav Kapoor of IL&FS says that valuations have started heating up and a correction is possible in the second half of October.

Technology, oil & gas, financials, auto and capital goods stocks gained ground while metals stocks are under pressure. Country's largest private sector lender ICICI Bank rallied 4 percent. Meanwhile, the rupee gained 19 paise to 61.20 against the US dollar. HSBC cuts its USD/INR forecast for the end of the year to 62 from 65 previously, citing improvements in the current account deficit and measures to attract inflows, reports Reuters. Globally Asian markets rallied 1 percent, tracking Wall Street's strong performance on optimism that there could be a deal to avert the US debt default.

12:00 pm FII View: Chris Wood, CLSA says the overwhelming consensus remains that a deal will be agreed upon at the last minute before the expiry of the US debt ceiling on October 17. "Greed and fear does not disagree. But there is a small possibility that such an outcome does not eventuate. While the payroll data is critical to market sentiment, greed and fear will continue to pay more attention to earnings growth trends," he said. Bharat Iyer, JP Morgan believes current earnings growth expectations of 10 percent for FY14 are optimistic and need to be pared down. ''That said, weak corporate performance may itself not precipitate a sharp sell-off in equity markets. Our portfolio stance is biased towards global sectors and companies,'' Iyer elaborates.

11:45 am Buzzer: Investors continued to buy shares of Ashok Leyland with the stock rising more than 5 percent in intraday trade after another block deal worth Rs 43 crore. On the Bombay Stock Exchange, 2.6 crore shares changed hands at Rs 16.60 apiece via block deal today. Promoter Hinduja Automotive on Thursday bought 2.6 crore equity shares or nearly 1 percent equity at 15.80 apiece via block deal, which was worth more than Rs 41 crore. Hinduja's stake in the company increased to 39.58 from 38.61 earlier. Lotus Global Investments was the seller in this block deal.

11:30 am Infosys Boardroom: Analysts and investors may be have been disappointed by flat operating margins despite strong revenue growth during the second quarter . But the Infosys management has made it clear that sustaining revenue growth will be its primary focus and margins, secondary. Speaking to CNBC-TV18 , Infosys CEO and Managing Director S D Shibulal said growth in the September quarter was broad-based and that net client addition was among the highest in the company's history.

The company added 37 clients during the quarter, five of which are Fortune 500 companies. Shibulal said that the next couple of quarters would be about investing in the business to take it to the next orbit of growth. But he also cautioned that the measures being taken by the company would take a while to translate into growth. And margins would not be the first priority at least for the next couple of quarters.

Boosted by strong Infosys September quarter earnings, the market seems to be in cheerful. The Sensex is up 196.95 points or 0.97 percent at 20469.86, and the Nifty up 57.30 points or 0.95 percent at 6078.25. About 1083 shares have advanced, 618 shares declined, and 102 shares are unchanged.

Tech stocks are stars of the day led by Infosys, Wipro and TCS . Banking, capital goods, auto and realty stocks are also rallying. ICICI Bank , L&T are other gainers in the Sensex. Metals stocks, which were up in yesterday's trade, are under selling pressure. Sesa Sterlite, Hindalco , Tata Power , Sun Pharma and ITC are major losers in the Sensex. Asian markets are firmly in the green today tracking wall street gains on optimism that US lawmakers would soon reach a deal to avert a debt default. The dollar index rose to a two-week high while treasury yields in the US rose to the highest level in more than two weeks at 2.71 percent. Gold slips below USD 1300/oz and is set for its second weekly decline.

Back home, it is a strong day for the rupee trading at it hit highest levels in 8-weeks. Rupee has broken resistence of 61.7 to 61.8 per dollar, according to dealers. The 10-year bond rallied some more on the back of rupee appreciation also on hopes of strong demand from the Rs 15000 crore auction today.

Analysts and investors may be have been disappointed by flat operating margins despite strong revenue growth during the second quarter. But the Infosys management has made it clear that sustaining revenue growth will be its primary focus and margins, secondary. Speaking to CNBC-TV18, Infosys CEO and Managing Director S D Shibulal said growth in the September quarter was broad-based and that net client addition was among the highest in the company's history.

The rally in equity benchmarks is also supported by strong global cues. Asian markets gained strength today on hopes of likely increase in US debt limit. Major Asian markets like Shanghai, Nikkei, Hang Seng and Kospi rallied more than a percent. 10:30am The market maintained its early trade momentum with the equity benchmarks rising a percent, supported largely by technology and banks stocks.

The Sensex is up 194.35 points at 20467.26, and the Nifty is up 52.80 points at 6073.75. Advancing shares outnumbered declining ones by 1135 to 518 on the Bombay Stock Exchange. Infosys is the leading gainer among largecaps today, rising 5 percent after it revised its full year revenue growth guidance to 9-10 percent from 6-10 percent earlier. After posting a fantastic 3.5 percent revenue growth, Infosys is well poised to grow between 12 and 13 percent in FY14, says Sanjeev Prasad of Kotak Institutional Equities. Other technology stocks followed the same trend too; HCL Technologies jumped 4 percent followed by TCS, Wipro and Tech Mahindra with 2-3 percent gains. Shares of Ranbaxy surged 5 percent as its US plant Ohm Laboratories finally got US Food and Drug Administration (US FDA) clearance.

9:53 am Currency check: Rupee has hit highest level since August 2013. The domestic currency is at 61.18 per dollar. Dhawal Dalal, Blackrock said, "Government bond prices are likely to trade higher amid optimism over US debt ceiling issue.

Talks of likely inclusion of Indian government bonds in major Asian bond indices have also added to the optimism. The range for the 10-year yield is seen between 8.40 - 8.50 percent today." 9:40 am Macro outlook: Instilling confidence in the Indian economy, Reserve Bank Governor Raghuram Rajan said the country's growth has bottomed out and the country does not face any difficulties whether on the external front or the internal front. Speaking at an International Monetary Fund (IMF) meet, Rajan said the government's debt to gross domestic product (GDP) is much lower than that of the industrialised nations and the government does not face any difficulties borrowing. 9:30 am Buzzer: Beleaguered drug maker Ranbaxy has found some respite.

The drug maker which has seen the ire of the US drug regulator, has now received a clean chit for its New-Jersey based Ohm Laboratories. In a statement, Ranbaxy said that Ohm Labs has received an Establishment Inspection Report (EIR) from the US Food and Drug Administration (US FDA) for its December 2012 inspection. An EIR is a signal that all the issues and concerns of non-compliance observed by the US FDA in its December audits has been satisfactorily resolved.

The US drug regulator had issued a Form 483 with its observations, highlighting non-compliance to current Good Manufacturing Practices (cGMP) at Ohm Labs. However, the company now has successfully rectified the errors. The stock is up over 5 percent on the BSE.

Cheering up Infosys September quarter results , the market has opened on a strong note. The Sensex is up 286.78 points or 1.41 percent at 20559.69, and the Nifty up 84.30 points or 1.40 percent at 6105.25. About 314 shares have advanced, 33 shares declined, and 9 shares are unchanged. Infosys jumped 7.5 percent in opening trade. Infosys' net profit grew by just 1.5 percent quarter-on-quarter to Rs 2,410 crore -- in-line with expectations - for the quarter ended September 2013. The country's second largest software services exporter revised guidance for the full year revenue growth to 9-10 percent from 6-10 percent earlier, which is better-than-expected by analysts.

Consolidated revenue jumped 15 percent to Rs 12,965 crore during the July-September quarter from Rs 11,267 crore in previous quarter. Other stocks that are top gainers in the Sensex are Wipro, Maruti Suzuki, Hindalco and ONGC. Meanwhile, the Indian rupee opened higher by 29 paise at 61.10 per dollar versus 61.39 Thursday. Ashok Gautam, Axis Bank said, "Likely thaw in US debt ceiling stand-off is rupee positive. Additionally, latest RBI moves which have allowed banks to raise equivalent to 100% of Tier 1 capital from Institutional investors upto November 30 continue to help sentiment.

The range for the day is seen between 60.50 - 61.30/USD." The US markets catapulted with an over two percent rally across the board to register their second biggest gains this year as lawmakers move closer to resolving the debt crisis. Europe too closed out the session with solid gains. The FTSE provisionally closed up 1.6 percent to 1244.19 points, stopping a three-day losing streak, with a broad-based rally displacing the weak investor sentiment seen in the last nine sessions. Currently, the Asian markets are following suit with the Nikkei spiking over one percent in early trade. Japan's Nikkei, the Shanghai Composite, Australia's S&P ASX 200 and South Korea's Kospi index all rallied over 1 percent each.