India : Sensex gains for 2nd day; Nifty holds 8000 ahead of FO expiry
After consolidation, the NSE Nifty managed to hold 8000 level for the second consecutive session Wednesday ahead of expiry of November futures & options contracts tomorrow. The broader markets smartly outperformed benchmarks, rising more than 1.2 percent on value buying. Investors continued to accumulate quality stocks at reasonable valuations, though they are worried over quarterly earnings growth after currency demonetisation.
The 30-share BSE Sensex was up 91.03 points at 26051.81 and the 50-share NSE Nifty gained 31 points at 8033.30. The market breadth was strong as about 1920 shares advanced against 671 declining shares on the Bombay Stock Exchange.
Markets are still not out of the woods and need alignment between banking and Nifty for any sustainable recovery, Jayant Manglik of Religare Securities said.
Needless to say, derivative expiry of November month contract will add to the volatility on Thursday’s trade, he feels. So, he reiterated cautious view and suggested restricting leveraged positions.
From here on, the government’s Budget announcements will be key indicators of a recovery, Samir Arora, Helios Capital Management Founder said. The Union Budget will be presented on February 1, 2017.
Arora hopes that the government makes sufficient provisions for the poor in the Budget. According to him, the rich may lose 30 percent, but the poor lose 100 percent of their net worth, he said.
Meanwhile, there was further relief to farmers in getting funds during liquidity crunch after demonetisation. National Bank for Agriculture and Rural Development has sanctioned an additional Rs 21,000 crore to district cooperative banks to enable more loans available for farmers ahead of the winter sowing season.
L&T gained 2.16 percent after the engineering major retained its order inflow and revenue growth guidance for FY17. Siemens lost 2 percent after lower-than-expected earnings, though profit jumped 11-fold on sale of healthcare business.
Lupin was the biggest gainer among Sensex stocks, up 5.2 percent. The pharma major has received tentative approval from US FDA for Abacavir Sulfate and Lamivudine tablets that are used in inhibition of HIV replication. Aurobindo Pharma gained 1.7 percent for approval from USFDA for same drug. However, Wockhardt lost 2 percent on USFDA warning letter to subsidiary CP Pharma.
Sun Pharma was up 1.6 percent after the company decided to acquire 85.1 percent stake in Russian company JSC Biosintez for USD 24 million and will also take debt of USD 36 million.
Technology stocks like TCS (up 1.05 percent) and Infosys (up 0.72 percent) gained momentum after the rupee breached 68.50 against the US dollar for the first time since February 29. It closed at 68.56 a dollar, down 31 paise from previous settlement.
Zee Media surged nearly 10 percent and Zee Entertainment gained 2 percent after they bought 49 percent stake in Reliance Group’s radio broadcast and 100 percent in general entertainment TV businesses for Rs 1,900 crore. Reliance Capital climbed 4.5 percent as the deal will help the company reduce debt.
Asian Paints was the top contributor to Sensex’s gains, up nearly 4 percent followed by Tata Motors (up 1.4 percent), Axis Bank (up 1.94 percent), Tata Steel (up 3.8 percent) and NTPC (up 2.6 percent). However, the selling in HDFC, HDFC Bank, Bharti Airtel, M&M and Maruti Suzuki restricted market upside, down 1-2 percent.
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