India : Nifty ends at fresh 11-month closing high, Sensex rises 128 pts
Wed Jul 20 2016
Rajesh Sharma (2003 articles)

India : Nifty ends at fresh 11-month closing high, Sensex rises 128 pts

MUMBAI : Equity benchmarks gained momentum with the Nifty ending at fresh 11-month closing high on Wednesday after two-day consolidation, tracking positive trend in Europe and supported by FMCG, healthcare and energy shares.The 30-share BSE Sensex was up 128.27 points at 27915.89 and the 50-share NSE Nifty gained 37.30 points at 8565.85 while the broader markets outperformed benchmarks.

The BSE Midcap and Smallcap indices rallied nearly 1 percent as about 1671 shares advanced against 1028 declining shares on the exchange.

“Market is gaining momentum supported by continued FII inflow and expectation that GST will see the light of day in the current session,” Vinod Nair of Geojit BNP Paribas Financial Services said, adding on the global front, the markets will keenly watch any cues on further stimulus plan from the European Central Bank’s meeting to be held on July 21.

Foreign institutional investors pumped in more than Rs 5,500 crore in July (till Tuesday) compared with Rs 5,174.80 crore in June. In fact, they have been net buyers from the month of March. They have purchased more than Rs 40,000 crore worth of shares since March 1, 2016 while the market surged more than 20 percent in the same period.

Ahead of first quarter earnings to be announced on July 21, HDFC Bank and ITC gained around a percent while Axis Bank and Hindalco Industries declined 1-1.5 percent.

Axis Bank has reduced its base rate by 10 basis points today to 9.35 percent, which will be effective from July 27. This came ahead of RBI’s monetary policy meeting that is scheduled on August 9.

Healthcare stocks hogged the limelight today as Sun Pharma (up 1.9 percent), Aurobindo Pharma (up 5 percent) and Glenmark (up 2.4 percent) have received approval from the US health regulator for antihyperlipidemic (cholesterol) drug Rosuvastatin calcium tablets. This approved ANDA, which is bioequivalent and therapeutically equivalent to the listed drug product Crestor tablets of IPR Pharmaceuticals Inc, has an estimated market size of USD 6.7 billion for the twelve months ending May 2016, according to IMS. Torrent Pharma (up 3 percent) and Alkem Labs (up 4.6 percent) were other filers for this drug.

Moreover, JP Morgan has initiated coverage on Aurobindo with overweight rating and target price of Rs 900 per share, implying 15 percent potential upside as it expects 18 percent earnings per share CAGR over FY17-19 and margin expansion of 150 basis points by FY18. The brokerage house feels the US is a growth driver for the company with improved execution & strong pipeline and margin expansion & debt reduction will be triggers over 2 years.

Lupin was up 1.4 percent after it launched generic Ortho Tri-Cyclen tablets, a contraceptive pill, in the US.

Wipro lost 2 percent on lower-than-expected guidance for Q2. The IT major expects 0.01-1 percent growth in Q2 dollar revenue against analysts’ estimates of 1.5-3.5 percent.

Among other largecaps, Dr Reddy’s Labs, Coal India, BHEL, Cipla and GAIL gained 2-3 percent while Tata Motors, ICICI Bank, Infosys and HDFC were down 0.3-0.9 percent.

In the broader space, DLF was up 3.7 percent as the realty major will realign shareholding arrangement in joint venture companies.

Praj Industries, the biofuels company, rallied 7 percent after the government said it is promoting biofuels such as biodiesel & ethanol as substitutes to mineral fuel.

Anant Raj shot up 20 percent after the board approved demerger of real estate division and project division while JBM Auto gained 19 percent as the company will invest Rs 300 crore towards electric mobility in India via its JV with Solaris Bus & Coach.

On the global front, European stocks extended gains, pushed higher by a rally in technology stocks as markets digested a slew of earnings, but mining stocks underperformed. Germany’s DAX and France’s CAC were up over 1 percent while Britain’s FTSE was up 0.3 percent (at 16 hours IST). Asia ended mixed.

Rajesh Sharma

Rajesh Sharma

Rajesh Sharma is Correspondent for Stock Market of South East Asia based in Mumbai. He has been covering Asian markets for more than 5 years.