Sensex up 103 pts; Reliance zooms 11%, tech HDFC twins drag

3:30 pm Market Closing:Reliance helped the Sensex close 103 points higher on Wednesday, though IT and HDFC Group stocks capped gains.

Reliance posted biggest single day gain since May 19, 2009, jumped 11 percent to close over Rs 1200-mark.

The 30-share BSE Sensex was up 103.12 points at 28864.71 and the 50-share NSE Nifty rose 19.05 points to 8926.90 but the market breadth was negative.

About 1763 shares declined against 1088 advancing shares on the BSE.

Axis Bank, Coal India and Asian Paints were other gainers while TCS, Infosys, HDFC and HDFC Bank fell 1-2 percent.

3:26 pm HOV Services in action: The stock surged 7 percent after the Board of directors of the company, on Wednesday, approved the proposed business combination of SourceHOV Holdings Inc., a Delaware (USA) based
corporation and Novitex Holdings, Inc with Quinpario Acquisition Corp. 2, publicly traded company listed on NASDAQ.

3:20 pm BEL OFS: Govt official says Bharat Electronics’ offer for sale issue has been witnessing record interest by FIIs and also there has been wide participation by institutional investors including banks.

According to them, the issue may see a record 50 percent subscription by FIIs. Non-retail investors’ reserved portion in the offer for sale issue, which will remain opened till February 23, has oversubscribed today.

3:10 pm Solar power capacity: The government today approved doubling of capacity to 40,000 MW in solar parks and Ultra Mega Solar Power Projects (UMSPP).

“The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, today approved the enhancement of capacity from 20,000 MW to 40,000 MW of the Scheme for Development of Solar Parks and Ultra Mega Solar Power Projects,” an official statement said.

The enhanced capacity would ensure setting up of at least 50 solar parks each with a capacity of 500 MW and above in various parts of the country.

Smaller parks in Himalayan and other hilly states, where contiguous land may be difficult to acquire in view of the difficult terrain, will also be considered under the scheme.

3:02 pm Buzzing: Idea Cellular shares gained strength in last hour of trade, up over 2 percent after sources told CNBC-TV18 that the company and Vodafone may be open to sell 15-20 percent stake in merged company to financial investors to reduce debt and infuse cash for operations.

Idea and Vodafone may be looking at ways to cut debt of over Rs 1 lakh crore in merged company. They may own at least 51 percent in merged entity, sources say.

Former Idea MD Sanjeev Aga will lead deal talks with Vodafone.

Reports suggest merger deal announcement is likely on February 24/25.

2:58 pm BEL OFS oversubscribed: Non-retail investors’ reserved portion in Bharat Electronics’ offer for sale issue is fully oversubscribed.

The government will sale its 5 percent stake in the aerospace and defence company via two-day offer-for-sale that will remain open till February 23, 2017.

The promoter is going to sell up to 1,11,68,139 equity shares at a floor price of Rs 1,498 per share. That will fetch the government around Rs 1,600 crore.

As on December 31, 2016, the government held 74.41 percent stake in the company.

2:56 pm Market Update: Equity benchmarks continued to trade higher amid consolidation, supported by Reliance Industries.

The 30-share BSE Sensex was up 84.11 points at 28845.70 and the 50-share NSE Nifty rose 13.50 points to 8921.35.

However, the market breadth was negative as about 1740 shares declined against 1055 advancing shares on the BSE.

2:52 pm Aviation stocks in action: Jet Airways gained 2.5 percent (on top of 7.4 percent gains in previous session, SpiceJet up 4.47 percent (up 7.11 percent) and InterGlobe Aviation up 0.33 percent (up 1.53 percent).

ICICI Securities analysed the Indian air traffic data for the month of January 2017.

It says passenger load factors (PLF) as well as traffic growth remain high with IndiGo, SpiceJet and Go Air maintaining PLFs at more than 90 percent in the domestic segment and overall domestic passenger growing by 25 percent in January 2017. Higher PLFs has led to widening of the gap between pax (passenger) growth and capacity growth in January 2017, which is one of the structural positive construct in Indian aviation.

PLF driven traffic growth is fundamentally better than capacity driven traffic growth, it feels. According to ICICI Securities, higher PLFs could partially be due to the advance sales which the airlines offered during the demonetisation time period (November-December 2016) and hence could remain elevated in February as well.

However, this also presents an opportunity for airlines to take yield hikes in the current booking window, especially with rising cost pressures, it feels. The research firm has maintained IndiGo as the top buy idea in aviation space.

2:46 pm NPA recovery: Public sector lender Canara Bank has initiated a host of measures to control and manage their NPA and stressed Asset portfolio which in the recent times is posing as a challenge to the entire banking industry.

Various restructuring/rehabilitation options are being extended to mid corporates, large corporates, MSME borrowers and farmers to address the stress in the system. Bank has been conducting regular recovery camps under settlement schemes for small/marginal farmers and other small borrowers across the Country with the participation of higher level Officers for quick decision for settlement of dues through compromise, the bank said.

The bank has so far declared 475 willful defaulters with an exposure of about Rs 3600cr as per RBI guidelines. Bank is also examining more cases for declaration as Wilful defaulters.

2:41 pm Debt performance: “Though the quantum of corporate debt outstanding has doubled to Rs 106.88 lakh as of December 2016 crore from Rs 45.31 lakh crore on March 2011, the penetration of the corporate debt market remains low in relation to GDP growth,” Naresh Takkar, MD & Group CEO, ICRA said.

He further said the corporate debt/GDP has increased by only 2 percent during these six years; that is, from 17.5 percent of GDP in FY 2011 to 19.5 percent in 9MFY2017.

This ratio is significantly lower than in other countries, like China (48 percent) or other smaller economies like Brazil (39 percent), Thailand (48 percent), Malaysia (46 percent) and Singapore (48 percent), reflecting the scope for considerable improvement of issuer and investor participation in the debt markets, it feels.

2:33 PM Reliance hits Rs 1,200-mark: Reliance Industries has hit Rs 1,200-mark for the first time since May 19, 2009, rising more than 10 percent.

2:20 PM Expert speak: Reliance’s scrip saw volumes crossing 40 lakh shares in less than half a day, a move reminiscent of its moves at the height the 2008 bull market when it was an investor favourite.

The shares have not performed greatly since but Edelweiss analyst Jal Irani says that a combination of factors, such as the company’s capex cycle drawing down as well as the trigger from Jio, means the stock “is only breaking out” and has way more room for upside.

In an interview with CNBC-TV18, Irani said that the street has been overly pessimistic about the prospects for Jio and said that the company had introduced plans “at a very healthy price point”. He added that Jio was only one part of the Reliance share price valuation, and said the company’s USD 40 billion investment in oil & gas projects would start to show up in its earnings.

Also Read: Here’s why private banks may have shown interest in Axis Bank

After seeing some likely profit booking in the previous hour, the market moved slightly up. The Nifty still managed to hold on to 8900-mark.

The 30-share Sensex was up 101.80 points at 28863.39, and the Nifty up 17.00 points or 0.19% at 8924.85.

Around 1,119 shares had advanced, while 1,600 shares declined. Meanwhile, 182 shares remained unchanged.

Reliance continued to be the top contributor on the Nifty and contributed close to 48 points.

Meanwhile, Axis Bank and Reliance Industries were the top gainers on the Sensex and Nifty, with gains of around 3 percent and over 9 percent, respectively. Meanwhile, NTPC and Infosys were the top losers on both the indices.