Sensex soars 521 points, Nifty ends at 8678; ICICI, HDFC gain 4%
18 Oct 2016
3:30 pm Market closing: The market had a stellar day with both benchmark indices gainign 1.8 percent from previous close. The Sensex was up 520.91 points or 1.9 percent at 28050.88 and the Nifty gained 157.50 points or 1.8 percent at 8677.90. About 1884 shares advanced, 949 shares declined, and 206 shares were unchanged.
Adani Ports, ICICI Bank, HDFC, Tata Steel and BHEL were top gainers while ONGC and Asian Paints were losers in the Sensex.
3:15 pm China's big investment: China's non-financial outbound direct investment surged 53.7 percent to USD 134.22 billion in the first nine months of this year as Chinese firms continued to invest big abroad, the Commerce Ministry said today.
China's non-financial outbound direct investment (ODI) surged 53.7 percent from a year ago to 882.78 billion yuan (USD 134.22 billion) in the January-September period, Shen Danyang, spokesman for the ministry, told media briefing here.
In September alone, China's ODI rose 56.9 percent year on year to USD 16.16 billion.
He attributed the rise in Chinese investments to the Belt and Road (Silk Road) Initiative, saying that it had boosted business cooperation between Chinese and foreign firms.
3:00 pm Market Update: Benchmark indices extended rally with the Sensex rising 493.78 points or 1.79 percent to 28023.75 and the Nifty up 141.25 points or 1.66 percent at 8661.65.
2:55 pm IPO: Drug ingredients maker Laurus Labs has received market regulator Sebi's go ahead to float an initial public offering.
Hyderabad-based firm had filed IPO papers with Sebi in August. The markets regulator issued its final 'observations' on October 10 on the draft offer documents, which is necessary for any company to launch the public offer.
According to draft papers, the public issue comprises fresh issue of shares worth Rs 300 crore and an offer for sale of 24,844,240 equity scrips by the existing shareholders, including Warburg Pincus group and Eight Roads Ventures.
Proceed of the issue would be utilised towards payment of loans and for general corporate purposes.
2:40 pm Earnings: Software solutions provider Mastek's profit more than doubled to Rs 7.7 crore in July-September quarter from Rs 3.6 crore in preceding period, driven by strong operational performance despite revenue degrowth.
Revenue during the quarter fell 3.2 percent to Rs 125.9 crore and other income declined 28.6 percent to Rs 2.5 crore on sequential basis.
The company has registered a whopping 90.2 percent growth in EBIT (earnings before interest and tax) at Rs 7.8 crore and a 300 basis points expansion in margin at 6.2 percent compared to June quarter.
2:30 pm Listing: Auto components maker Endurance Technologies is set to list its equity shares on exchanges on October 19. It has fixed issue price at the higher end of price band of Rs 467-472 per share.
The issue, which opened for subscription during October 5-7, oversubscribed 43.84 times. The reserved portion of qualified institutional buyers oversubscribed 53.43 times and non-institutional investors 127.07 times.
The Aurangabad-based Endurance raised around Rs 1,161 crore through the issue, including Rs 348 crore from anchor investors.
Incorporated in 1999, the company is prominently 2-wheeler and 3-wheeler component supplier in India and 4-wheeler auto component supplier in Europe. It has 25 manufacturing facilities of which 18 are in India and 7 are in Europe (5 plants in Italy and 2 in Germany).
2:20 pm Midcap index changes: Private sector lender IDFC Bank will be included in the NSE's Nifty Midcap 50 index from November 15.
Havells India, on the other hand, will move out of the index.
India Index Services & Products Ltd, which maintains Nifty indices, said in a statement that the changes would become effective from November 15, 2016.
Earlier this month, IDFC Bank was included for trading in the securities lending and borrowing segment.
Prior to that, the exchange had announced that it would launch futures and options (F&O) contracts in IDFC Bank, DCB from September 30.
There are currently over 200 securities available in the F&O segment for trade.
2:00 pm Market Check
Benchmark indices rallied further in afternoon trade with the Sensex inching towards 28000 level, driven by HDFC (up 3.37 percent), ICICI Bank (up 4.04 percent) and ITC (up 2.18 percent).
The 30-share BSE Sensex was up 431.16 points or 1.57 percent at 27961.13 and the 50-share NSE Nifty gained 127.40 points or 1.50 percent at 8647.80.
The BSE Midcap and Smallcap indices rose over a percent on strong breadth. About 1832 shares advanced against 848 declining shares on the exchange.
HDFC Bank, Infosys, L&T and Reliance Industries and Axis Bank gained 1-2 percent whereas ONGC and Asian Paints were the only losers among Sensex 30 stocks.
1:50 pm Addition and deletion: Private sector lender IDFC Bank will be included in the NSE's Nifty Midcap 50 index from November 15.
Havells India, on the other hand, will move out of the index.
India Index Services & Products Ltd, which maintains Nifty indices, said in a statement that the changes would become effective from November 15, 2016.
Earlier this month, IDFC Bank was included for trading in the securities lending and borrowing segment.
Prior to that, the exchange had announced that it would launch futures and options (F&O) contracts in IDFC Bank, DCB from September 30.
There are currently over 200 securities available in the F&O segment for trade.
1:30 pm Market outlook: Asserting that over a period of time investors look for scale, sustainability and maturity in companies, Hiren Ved of Alchemy Capital Management said that great companies going through difficult times can be the best bets.
On Ramesh Damani's signature show "Wizards of Dalal Street", Ved explained that Bajaj Finance came up trumps after the global financial crisis by tapping into domestic growth and consumption story.
The company, an early entrant then in the consumer finance business, capitalised on the business opportunity by placing in stores executives who would instantly assess and check customers' eligibility for loans, Ved said. Its peers went for scale and cut interest rates instead, he added.
The market is gaining with support from banks, pharma, metals and infra stocks. The Sensex is up 347.57 points or 1.3 percent at 27877.54 and the Nifty is up 99.45 points or 1.2 percent at 8619.85. About 1837 shares have advanced, 815 shares declined, and 179 shares are unchanged.
ICICI Bank, Adani Ports, HDFC, Tata Steel and Bajaj Auto are top gainers while Asian Paints, ONGC and GAIL are losers in the Sensex.
European stocks were higher as firming oil prices lifted global sentiment. The pan-European STOXX 600 was around 1 percent higher with all major bourses in positive territory.
Investor caution continues to mount as election day approaches in the U.S. This as comments from Federal Reserve Vice Chair Stanley Fischer on Monday suggested the U.S. central bank was "very close" to meeting its employment and inflation goals, sending US stocks lower into Monday's session close.
12:58 pm Market Update: Benchmark indices rallied further with the Nifty reclaiming 8600 in afternoon trade.
The 30-share BSE Sensex was up 292.95 points or 1.06 percent at 27822.92, and the Nifty up 84.30 points or 0.99 percent at 8604.70.
About 1804 shares advanced against 796 declining shares on the BSE.
12:40 pm Europe opens: European stocks opened higher as firming oil prices lifted global sentiment. The pan-European STOXX 600 was around 0.62 percent higher with all major bourses in positive territory.
However, data from the Institute of International Finance showing weak portfolio flows to emerging markets is adding to nerves around the strength of China and is just one factor putting a break on risk appetite.
Investor caution continues to mount as election day approaches in the US.
12:33 pm Buzzing: Arvind shares hit record high of Rs 368.50, up 5.5 percent intraday after CLSA raised target price on the stock to Rs 418 from Rs 362, citing improving return on capital employed (RoCE) profile in textile business.
While retaining buy call on the stock, the brokerage house says Arvind's textiles business (contributed 62 percent to FY16 revenue) is structurally shifting in favour of the less capital-intensive garmenting division with a reduced focus on commodity denims. Meanwhile, expansions are being restricted only to critical units with a focus on outsourcing the rest.
This offers visibility of an improving RoCE even as cotton price volatility is a near-term headwind, it says, adding a more capital-efficient asset-light textiles business should continue to fund growth in the brands & retail (B&R) division.
12:20 pm Next rate cut?: The Reserve Bank of India is expected to take advantage of expectations that inflation will remain low in the near-term and cut interest rates again early next year with an aim to boost already-solid growth a little bit more, a Reuters poll found.
New RBI Governor Urjit Patel and his six-member Monetary Policy Committee used the same rationale for their surprise 25 basis point (bps) cut to 6.25 percent earlier this month, the lowest since November 2010.
Inflation cooled to a 13-month low of 4.31 percent in September and the latest Reuters poll of economists expect it to average 4.8 percent in the January-March quarter of 2017, just under the RBI's near-term target.
"The significant run-up in CPI inflation between April and July was mainly driven by food prices. But thanks to normal rains, it could reverse quickly, taking inflation to well below (the) RBI's early-2017 target of 5 percent," wrote Pranjul Bhandari, chief economist for India at HSBC.
12:00 pm Market Check
Equity benchmarks as well as broader markets extended rally in noon trade with the Nifty inching towards 8600 level, aided by index heavyweights HDFC, Reliance Industries, ICICI Bank, ITC and Infosys.
The 30-share BSE Sensex was up 260.52 points or 0.95 percent at 27790.49 and the 50-share NSE Nifty rose 74.55 points or 0.87 percent to 8594.95. The BSE Midcap and Smallcap indices climbed over a percent. About 1755 shares advanced against 726 declining shares on the exchange.
Most markets in Asia were higher, as oil prices advanced. China's Shanghai and Hong Kong's Hang Seng gained more than 1 percent.
Oil prices rose as some analysts said markets might not be quite as oversupplied as suggested by many, with global inventories rising less than expected ahead of the high-demand winter heating season in the northern hemisphere. A drop in the dollar away from seven-month highs the previous day also supported crude, as a lower greenback makes fuel purchases cheaper for countries using other currencies domestically.
Brent crude was at USD 51.85 per barrel, up 0.64 percent from the previous close. US West Texas Intermediate (WTI) crude was up 0.64 percent at USD 50.26 a barrel.
11:55 am Poll: The Reserve Bank of India is expected to take advantage of expectations that inflation will remain low in the near-term and cut interest rates again early next year with an aim to boost already-solid growth a little bit more, a Reuters poll found.
New RBI Governor Urjit Patel and his six-member Monetary Policy Committee used the same rationale for their surprise 25 basis point (bps) cut to 6.25 percent earlier this month, the lowest since November 2010.
Inflation cooled to a 13-month low of 4.31 percent in September and the latest Reuters poll of economists expect it to average 4.8 percent in the January-March quarter of 2017, just under the RBI's near-term target.
11:30 am Market outlook: Ramesh Damani, Member, BSE said that Sensex carries a great importance for the Indian economy. ''The story of Sensex is ingrained in our memory,'' he said, adding that the BSE is the cathedral to capitalism. Sensex will be compounding at a rate of 15-16 percent as it has been doing so far.
He is positive about equities as he thinks the underlying strength is enormous. ''You need to differentiate between risk and volatility. You see volatility, not risk here.''
The US election is a key event. It is a horse race, and a lot of things can happen, feels Damani. But if Donald Trump beats the odds and comes to power, then markets will react badly, beginning with the collapse in Mexican peso. If Hillary Clinton wins the polls, then it will be status quo.
The market continues to see good buying but the Nifty has not been able to touch 8600 yet. The 50-share index is up 61.95 points or 0.7 percent at 8582.35 and the Sensex is up 210.59 points or 0.8 percent at 27740.56.
Tata Steel, HDFC, ICICI Bank, Reliance and Adani Ports are top gainers while Asian Paints, ONGC, Bharti and TCS are losers in the Sensex.
Gold prices were higher by Rs 58 to Rs 29,859 per 10 gram in futures trade as speculatorswidened their bets taking positive cues from the global market.
At Multi Commodity Exchange, gold for delivery inFebruary 2017 contracts was up by Rs 58 or 0.19 percent to Rs 29,859 per 10 gram in business turnover of one lot.
Analysts said widening of positions by participants following a better trend in global market as US manufacturing data failed to lend clear support for higher interest rates in the world's biggest economy, weakening dollar and rising demand for the precious metal as safe-haven supported the upside in gold futures here.
10:45 am Outlook: Ramesh Damani, Member, BSE said he is positive about equities as he thinks the underlying strength is enormous. ''You need to differentiate between risk and volatility. You see volatility, not risk here.''
The US election is a key event. It is a horse race, and a lot of things can happen, feels Damani. But if Donald Trump beats the odds and comes to power, then markets will react badly, beginning with the collapse in Mexican peso. If Hillary Clinton wins the polls, then it will be status quo.
10:15 am Patents: Suven Life Sciences announced that the grant of one product patent from Europe and one product patent from Israel corresponding to the new chemical entities (NCEs) for the treatment of disorders associated with Neurodegenerative diseases.
These patents are valid through 2030 and 2029 respectively.
These are useful in the treatment of cognitive impairment associated with neurodegenerative disorders like Alzheimer's disease, Attention deficient hyperactivity disorder (ADHD), Huntington's disease, Major Depressive disorder (MDD), Parkinson and Schizophrenia.
With these new patents, Suven has a total of 23 granted patents from Europe and 12 granted patents from Israel.
10:00 am Market Check
Equity benchmarks retained early gains with the Sensex rising over 200 points, driven by short covering.
The 30-share BSE Sensex was up 207.94 points at 27737.91 and the 50-share NSE Nifty gained 58.90 points at 8579.30. The broader markets marginally outperformed benchmarks as the BSE Midcap and Smallcap indices rising over 0.8 percent on strong breadth.
About three shares advanced for every share falling on the exchange.
HDFC and HDFC Bank rebounded after yesterday's sell-off, up 1.9 percent and 0.4 percent, respectively. ICICI Bank extended rally, up 1.5 percent in addition to 7 percent upside in yesterday's trade, after while maintaining buy call, Nomura raised target price from Rs 285/share to Rs 325/share.
9:40 am Market check: The market is still surging with the Sensex up 207.49 points or 0.7 percent at 27737.46. The Nifty is up 61.95 points or 0.7 percent at 8582.35. About 1397 shares have advanced, 335 shares declined, and 85 shares are unchanged.
Tata Steel, Adani Ports, HDFC, ICICI Bank and BHEL are top gainers in the Sensex. Asian Paints, Bharti and Hero are losers in the Sensex.
9:30 am FII view: Nupur Gupta of Goldman Sachs thinks divergence between equity earnings and economic growth should not necessarily be taken as evidence against a pick-up in growth, but rather as a function of measurement and composition differences.
"Looking forward, our strategists expect corporate earnings growth to recover in FY17 and outpace its regional peers," he says.
That said, he thinks that the under-representation of agriculture and elevated credit costs for public sector banks may continue to cause earnings growth to trail real economic growth in the near term.
To benefit from potential swings in underlying economic growth, his strategy team recommends buying consumption and government capex beneficiaries, Gupta says.
The market has opened in positive territory with support from banks. The Sensex is up 189.61 points or 0.7 percent at 27719.58 and the Nifty is up 51.40 points or 0.6 percent at 8571.80. About 729 shares have advanced, 134 shares declined, and 33 shares are unchanged.
ICICI Bank, Adani Ports, Axis Bank, Tata Motors and Tata Steel are top gainers in the Sensex.
The Indian rupee gained in the early trade. It has opened higher by 10 paise at 66.79 per dollar versus previous close 66.89.
Ashutosh Raina of HDFC Bank said, "The USD retreated from the recent highs it hit against most of its peers, with some hawkish comments form Fed speakers increasing the probability of a December rate hike.
"The USD-INR pair continues to trade in the 66.50-67/dollar range with some depreciating bias, as some FII outflows continue to pressurise the pair," he added.
The US dollar retreated from seven-month highs as some investors took profits from the recent dollar rally and on speculation that the Federal Reserve will maintain a go-slow pace of raising interest rates even if the central bank tightens policy later this year.
The crucial three-day meeting of the all-powerful GST council is slated to begin today. Issues like the GST rate and state compensation formula will be in focus.
Among global peers, Asian stocks edged higher and the dollar consolidated recent gains though risk appetite was low as weak US markets prompted investors to stay on the sidelines.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.2 percent in early trade. Australia's benchmark index was up 0.3 percent.
Wall Street ended lower as lower oil prices weighed on energy shares. The Dow Jones industrial average fell 0.29 percent, to 18,086.4, the S&P 500 slipped 0.3 percent to 2,126.5 and the Nasdaq Composite dropped 0.27 percent, to 5,199.82.
Crude oil prices dropped, weighed by oversupply concerns, with US crude dropping below 50 dollars a barrell as trade volumes spiked ahead of the October 20 expiry date for american futures contracts. The Iranian Vice President's comments that his country needs to regain its market share added to bearish sentiments but expectations of an upcoming opec production cut limited losses.
Gold price rose, partly lifted by steady flows into exchange-traded funds and a dip in the dollar after touching seven-month highs.