Nifty holds 8800, Sensex strong; IT stocks down on profit taking
11:53 am CLSA on Kotak Bank, Axis:CLSA says if Kotak Mahindra Bank and Axis Bank are merged then the merged entity would be among the largest private banks and the merger would allow banks to capitalise on individual strengths.
According to the research firm, branch rationalisation may aid improve productivity/reduce cost-income ratio and Kotak promoters’ holdings could fall from 34 percent to 19 percent post merger.
Key challenge would be to align asset quality of the two banks, it feels while saying higher stressed loans at Axis Bank than Kotak Mahindra Bank may raise credit costs.
11:40 am Interview: Biocon Thursday announced the US Food and Drug Administration has accepted Mylan’s Biologics License Application (BLA) for biosimilar chemotherapy drug Pegfilgrastim for review. Mylan is Biocon’s partner for biosimilar development.
Sharing details on the development with CNBC-TV18 Biocon Chairperson and Managing Director Kiran Mazumdar Shaw said, “This is a very important acceptance.”
However, the drug will not be launched immediately as there could be certain patent challenges, she added.
She expects the launch in financial year 2018 or 2019.
She said the USD-3.5-billion US market, is the biggest for the company and that biosimilars will contribute to company’s topline growth exponentially.
11:20 am FII View: Mahesh Nandurkar of CLSA says demonetisation hit the December 2016 quarter though it turned out to be a better quarter generally for all domestic-oriented companies barring power and telecom.
Nifty earnings growth of 6 percent turned out to be a tad weaker due to a drag from Tata Motors and Axis Bank, he adds.
He now expects FY18 Nifty earnings growth of 17 percent with small downside risk due to margin concern.
In model portfolio, he removed Tata Motors and reduced the weight for HUL, ITC and Maruti. He raised IT rating to overweight and added GSK Consumer.
Nandurkar removed ITC and Maruti from high-conviction list but added HCL Technologies.
Also read – Exclusive Moneycontrol interview of RBI Governor Urjit Patel
11:00 am Market Check
The market remained strong in morning, though it wiped out some early gains. HDFC Bank retained its top position in buying list, up 6.7 percent after the RBI has withdrawan the limit for purchase of bank’s shares.
The 30-share BSE Sensex rose 172.98 points to 28474.25 and the 50-share NSE Nifty gained 41.80 points at 8819.80.
The market breadth also remained in favour of advances. About 1340 shares gained against 927 declining shares on the BSE.
Cadila Healthcare extended its rally, up 4 percent on top of 20 percent surge in previous session as its Moriaya facility did not receive any observations from USFDA post inspection.
The rally also spilled over to other pharma stocks on hopes of more positive vibes from US FDA. Sun Pharma was up 2 percent and Lupin gained 1.4 percent. Wockhardt surged 3 percent.
TCS and Infosys fell more than 1 percent on profit booking. Maruti Suzuki, SBI, Hero Motocorp, Coal India and HUL were other losers.
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