India : Nifty above 8600, Sensex gains over 200 pts; Tata Steel up 6%
Fri Aug 05 2016
Rajesh Sharma (2002 articles)

India : Nifty above 8600, Sensex gains over 200 pts; Tata Steel up 6%

The market has opened fairly strong. The Sensex is up 231.03 points or 0.8 percent at 27945.40, and the Nifty up 71.75 points or 0.8 percent at 8622.85. About 643 shares have advanced, 107 shares declined, and 32 shares are unchanged.

Tata Steel, Tata Motors, Bharti Airtel, Adani Ports and BHEL are top gainers while Infosys, Asian Paints, Lupin, Coal India and M&M are losers in the Sensex.The Indian rupee opened higher by 6 paise at 66.85 per dollar against previous close 66.91. The pound held near a one-week low following the Bank Of England’s first interest-rate cut in more than seven years.

The dollar, meanwhile, gained against a basket of currencies as investors continue to balance positions ahead of today’s crucial US nonfarm payrolls report for July.

Nomura expects the GST to be positive for consumption-related  sectors and the cement sector, given the potential reduction in tax incidences. Logistics should benefit from the removal of inter-state taxation inefficiencies, while streamlined logistics may reduce truck demand. Its  top GST plays are: Hindustan Unilever, Maruti Suzuki , Eicher Motor, Crompton Consumer and Concor while ITC and Ashok Leyland will be negatively affected, in our view.Engines manufacturer Cummins India reported 13.62 percent decline in net profit at Rs 181.18 crore for the first quarter ended June 30, 2016-17.

The company had posted a consolidated net profit of Rs 209.9 crore in the same period of last fiscal, Cummins India said in a BSE filing.

Net sales during the quarter under review were down 3.89 percent to Rs 1,228.41 crore, as against Rs 1,278.23 crore in the same period of 2015-16 fiscal.

Cummins India Chairman and Managing Director Anant J Talaulicar said: “In this quarter, the company achieved strong domestic revenue growth as compared to the same quarter last year as well as prior quarter, as our major markets improved led by government driven infrastructure investments accompanied by solid management execution.”

A ‘crisis of yield’ underway in global bond markets has driven investors to chase high yields elsewhere, says Raamdeo Agrawal, Joint MD, Motilal Oswal. In an interview with CNBC-TV18, the noted value investor was talking about valuations of percieved expensive shares in India, such as private banks and NBFCs, which he said continue to offer prospects of high returns on equity. He added that he wouldn’t sell such shares. “You don’t come in front of a speeding truck,” Agrawal said.

Asian shares joined a rise in global stock prices after the Bank of England (BoE) launched a potent post-Brexit stimulus campaign, but some caution before a big US jobs report limited gains.An overnight rally in crude oil prices also sharpened risk appetites, while sterling nursed deep losses after sliding on news of the BoE stimulus plan. The Bank of England said it would take “whatever action is necessary” to achieve stability in the wake of Britain’s vote to leave the European Union. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent, headed for a 0.9 percent weekly gain. MSCI’s world stocks index rose 0.3 percent.

The BoE’s quarter point rate cut to a record low 0.25 percent sent already low global bond yields even further down with British yields hitting record lows as gilt prices rose.

Wall Street ended little changed ahead of the July US nonfarm payrolls report which will be scoured for clues to whether it is strong enough to support a Federal Reserve rate hike as early as September.

 

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.

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