Market Live: Sensex, Nifty remain strong; Tata Steel up nearly 4%
2:00 pm Market Check: Benchmark indices remained positive in afternoon following uptrend in European markets after Federal Reserve delivered the much-anticipated rate hike yesterday. Investors awaited the outcome of GST Council meet.
The 30-share BSE Sensex gained 141.31 points at 29,539.42 and the 50-share NSE Nifty rose 53.85 points to 9,138.65. About 1697 shares advanced against 994 declining shares on the BSE.
Ajay Kapur of Bank of America Merrill Lynch says India has shown strong improvement in its macro fundamentals, however, the earnings recovery continues to be elusive.
Steep EPS growth expectations of 18.3 percent for 2017 are vulnerable to downward revisions as the currency is much less competitive compared with its peers in emerging markets, he feels.
The broader markets rallied further in afternoon, up more than 1 percent. JSW Steel, Jindal Steel, Reliance Capital, Indiabulls Housing and Bajaj Finserv were top midcap gainers, rising 3-5 percent.
Tata Steel, Adani Ports and Hindalco Industries were top gainers among Nifty stocks, up 3-4 percent whereas Hero Motocorp, Bharti Airtel, Coal India, Reliance Industries and ICICI Bank were under pressure.
1:50 pm Tyre sector outlook: Tyre stocks soared on Thursday backed by falling rubber prices and significant drop in dumping of Chinese tyres.
Sharing his outlook on the sector with CNBC-TV18, Mayur Milak, Research Analyst – Institutional Equity at Anand Rathi said Indian tyre companies will benefit significantly. However, he cautioned rubber companies could fail to benefit unless these factors sustain for a longer period of time considering the inventory carried by them is of around 40-45 days.
1:29 pm FII View: Ajay Kapur of Bank of America Merrill Lynch says India has shown strong improvement in its macro fundamentals, however, the earnings recovery continues to be elusive.
Steep EPS growth expectations of 18.3 percent for 2017 are vulnerable to downward revisions as the currency is much less competitive compared with its peers in emerging markets, it feels.
Kapur says 13.8 percent year-to-date returns in USD terms have driven valuations to expensive levels historically as well as compared with other emerging markets in the region.
However, PM Modi’s recent victories in state elections could lead to positive policy surprises, and that is a risk to underweight rating, he says.
1:10 pm Market Check: The market continued to be bullish in the afternoon session, driven by the Street cheering the factored-in rate hike by US Federal Reserve.
The Sensex was up 147.39 points at 29545.50, while the Nifty was up 54.80 points at 9139.60. The market breadth was narrow than morning trends, with 1,698 shares having advanced, 909 shares having declined, while 171 shares are unchanged.
Adani Ports and Tata Steel continue to rule the list of top gainers on both the indices, while Hero MotoCorp and Bharti Airtel were the top losers.
Idea Cellular added nearly 2 percent intraday on Thursday as investors cheered the buzz of its merger with Vodafone entering final stages.
Sources told CNBC-TV18 that Idea and Vodafone are currently in price negotiations stage. Idea promoter is looking at a price above last QIP price of Rs 134 a share. The Aditya Birla Group firm is keen for an equal play in the merged entity.
Gold loan firm Manappuram Finance saw buying momentum on Thursday as the stock rose nearly 2 percent intraday. The company’s promoter was looking to sell stake in the firm, which will be triggering an open offer in the firm, sources told CNBC-TV18.
12:55 pm IPO: Shankara Building Products, the retailer of home improvement and building products, is set to launch its initial public offer of Rs 350 crore on March 22. The price band for the issue is fixed at Rs 440-460 per share.
“The issue comprises of a fresh issue of equity shares aggregating up to Rs 45 crore and an offer for sale of up to 8,16,252 shares by promoter Sukumar Srinivas and up to 57,05,488 shares by Fairwinds Trustees Services (acting in the capacity of trustee of Reliance Alternative Investments Fund – Private Equity Scheme I),” the company said in its press release.
The issue, which will close on March 24, will constitute at least 25 percent of the post offer paid-up equity share capital of the company.
12:40 pm Macquarie on HCL Tech: Macquarie says HCL Technologies is its top pick in the large cap Indian IT services space as the company has been striking a good balance between payout and merger & acquisition investment.
On buyback, the brokerage house says without shareholder nod, company can buy back shares up to 10 percent of shareholder equity and with shareholder nod, it can buy back up to 25 percent of shareholder equity.
The company will consider a proposal for buyback of shares on March 20.
Macquarie says return of capital and US visa reforms are two dominant themes for Indian IT sector.
12:30 pm Rupee Update: The Indian rupee pared its initial gains, while holding its 16-months highs by 28 paise to 65.41 in late morning deals, on the back of continued unwinding of dollars from banks and exporters amid heavy foreign capital inflows and strong equities.
Weak dollar overseas also lifted the rupee sentiment, a forex dealer said.
Earlier, the rupee resumed higher at 65.40 as against yesterday’s closing level of 65.69. Later, it strengthened sharply to 65.21 before trading at 65.41 at 1020 hours.
The domestic currency hovered in a range of 65.41 and 65.21 during morning deals.
12:15 pm Fitch on Fed hike: The Federal Reserve’s move to hike interest rates by 25 basis points, only the third hike in over 10 years and second in 3 months, marks the beginning of a new phase of US monetary policy normalisation, says Fitch Ratings.
Fitch said that the recent US rate hikes could mark the beginning of a significant shift in global interest rate environment, with benchmark US policy rates settling higher over the long-term than current market expectations.
“The prediction for three hikes in 2017 in the Federal Open Market Committee’s (FOMC) December 2016 Summary of Economic Projections was initially met with some scepticism in financial markets.
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12:00 pm Market Check: Equity benchmarks as well as broader markets continued to run up in noon on hopes of State GST and Union Territory GST bills getting cleared in GST Council meet later today.
If it approved, then that would be another decisive step in the run up to the implementation of the overhauled tax regime from July 1. Final drafts of the three other bills — Integrated GST (IGST), Central GST (CGST) and Compensation bill — already cleared by the Council.
The 30-share BSE Sensex was up 114.60 points at 29,512.71 and the 50-share NSE Nifty gained 46 points at 9,130.80 while the broader markets extended rally, up nearly a percent on strong breadth.
About two shares advanced for every share falling on the BSE.
Reliance Capital gained more than 4 percent as the company said it would expand health insurance business and that would be transferred to company’s separate subsidiary. Ravi Vishwanath will be CEO of the new company created for health insurance, it added.
Jindal Steel & Power rallied 4 percent as Deutsche Bank has upgraded the stock to hold with a target price at Rs 112, saying its upgrade premised on improving confidence in steel volume ramp-up. Steel volume growth and cost savings will drive 90 percent EBITDA growth over FY17-19, it feels.
11:49 am Expert Speak: The Fed increased the interest rate by 25 basis points to a range of 0.75 percent to 1.00 percent on strong macroeconomic data and confidence in inflation which is rising to central bank’s target.
“This is an excellent scenario for emerging markets. We did not get an acceleration of rate increase which the people feared could happen from Fed meeting. It looks like Fed wants to increase rates, but is little nervous,” Geoffrey Dennis, Head of Global Emerging Market Strategy at UBS said in an interview with CNBC-TV18.
“This is like a goldilocks scenario for EMs. Although we are not wildly bullish on developed markets because we are concerned about valuations. But, EM valuation is not particularly stretched compared to developed markets,” he said.
11:32 am NSEL update: The Enforcement Directorate has provisionally attached properties worth Rs 415 crore of Laxmi Group companies in an on-going money laundering case connected with the NSEL scam.
The agency has attached company’s land, building, godowns and real estate of the company.
In the NSEL scam, the accused entered into a criminal conspiracy to defraud the investors, inducing them to trade on the NSEL platform and also created forged documents.
11:15 am Market Check: After posting record high in the morning session, the market continued its uptrend, driven by the priced-in rate hike by the US Fed and the political stability after the BJP won polls in four out of five election-bound states.
The 30-share Sensex was up 142.63 points at 29540.74, while the Nifty was up 49.95 points at 9134.75. The market breadth remained healthy as 1,644 shares had advanced, 710 shares declined, while 146 shares are unchanged.
Adani Ports and Tata Steel were the top gainers, while Bharti Airtel and Hero MotoCorp were the top losers on both the indices.
HCL Technologies shares advanced nearly 3 percent intraday Thursday as it is going to consider buyback of its shares. “The company’s board meeting will be held on March 20, to consider, a proposal for buyback of the equity shares,” company said in BSE
filing.
10:58 am Deutsche on BoB: Deutsche Bank says for Bank of Baroda, the worst of non-performing loan worries is behind and net interest margin pressure will sustain.
FY18 should witness recoveries on asset quality front, it believes. The bank expects 15 percent return on equity by FY19 and the brokerage house is building at 12 percent return on equity in its expectations.
Deutsche has a buy call on the stock with a target price at Rs 205.
10:44 am Adani Enterprises in focus: Cricket legends Ian and Greg Chappell are among 90 prominent Australians who have signed an open letter calling on Indian energy giant Adani to abandon its controversial coal mine project in Queensland, warning it could damage bilateral ties and even affect sporting links.
The 21.7 billion dollar Carmichael coal mine project, one of the world’s largest, to start construction this year after being given the green light by the federal and Queensland state governments.
The project involves dredging 1.1 million cubic metres of spoil near the Great Barrier Reef Marine Park, which will then be disposed off on land.
10:29 am Market Outlook: Experts are upbeat on the positive movements and are not very concerned about high valuations.
“Growth is returning to economies and the atmosphere for global equities is good now,” Vibhav Kapoor, Director of IL&FS, told CNBC-TV18 in an interview. In terms of a correction due to valuations, he feels it may be minimal and does not expect the markets to fall a lot.
Kapoor sees the Nifty clocking 10,300 by March 2018, albeit two caveats of earnings growth and 10-year bond yields in the US.
10:15 am Rating upgrade: Deutsche Bank has upgraded JSPL to hold with a target price at Rs 112, saying its upgrade premised on improving confidence in steel volume ramp-up.
Steel volume growth and cost savings will drive 90 percent EBITDA growth over FY17-19, it feels.
At 10:00 am Market Check: Benchmark indices retained early gains as the Nifty 50 surpassed 9150 level ahead of GST Council meet later today and after Federal Reserve hiked interest rate by 25 basis points. The rally was backed by banking & financials, technology, auto, pharma and metals stocks.
The 30-share BSE Sensex gained 179.32 points at 29,577.43 and the 50-share NSE Nifty rose 58.65 points to 9143.45.
The broader markets outperformed benchmarks again, up 0.8 percent on strong breadth. About three shares advanced for every share falling on the BSE.
Jayant Manglik of Religare Securities says his view is bullish on markets and suggests maintaining buy on dips approach.
Adani Ports was top gainer among Sensex stocks, up more than 3 percent followed by Infosys, HDFC, L&T, Tata Motors, Asian Paints and Tata Steel.
9:58 am CLSA on USL: CLSA has downgraded United Spirits to sell post recent run-up, saying regulatory issues continued as Karnataka government raised alcohol taxes on Wednesday.
It feels tax rate hike will lead to a product price hike of 7-8 percent by the company. Hikes are manageable for the company but it leaves little scope for margin-accretive hikes, the brokerage house says.
Hardening in input prices could raise concerns on margins, according to the research firm. Key stock drivers are SC verdict on liquor ban & effective GST, CLSA says.
Karnataka has raised additional excise duties (AED) by 6-16 percent on alcohol from April.
9:45 am SBI credit card JV: State Bank of India said it will hike its stake in its two credit card joint ventures with General Electric Company to 74 percent.
SBI’s board has given approval to infuse Rs 1,160 crore in the two JVs — SBI Cards and Payment Services Pvt Ltd (SBICPSL) and GE Capital Business Processes Management Services Ltd (GECBPMSL)– through purchase of equity shares from GE Capital so as to increase the bank’s stake in both the companies to 74 percent, SBI said in a filing to the BSE.
The American company seeks to exit SBI Cards.
SBI currently holds 60 percent stake in SBICPSL and 40 per cent in GECBPMSL. The balance being held by GE Capital in both the ventures.
9:30 am GST Council meet: The Goods and Services Tax (GST) Council headed by Finance Minister Arun Jaitley is expected to approve the remaining two crucial bills — State GST (SGST) and Union Territory GST (UTGST) — today.
If it approved, then that would be another decisive step in the run up to the implementation of the overhauled tax regime from July 1. Final drafts of the three other bills — Integrated GST (IGST), Central GST (CGST) and Compensation bill — already cleared by the Council.
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9:15 am Market Check: After a day of consolidation, equity benchmarks opened sharply higher on Thursday, with the Nifty hitting all-time high after the Federal Reserve raised rates and ahead of GST Council meet.
The 30-share BSE Sensex was up 156.94 points at 29,555.05 and the 50-share NSE Nifty gained 53.90 points at 9,138.70. About 831 shares advanced against 172 declining shares on the BSE.
Adani Ports, HUL, BHEL, L&T, ONGC, Hindalco and HCL Technologies gained 1-3 percent whereas Hero Motocorp fell half a percent.
Federal Reserve on Wednesday raised interest rate by 25 basis points and set a range for interest rate at 0.75-1 percent but kept a dovish stance. It forecast 3 rate hikes each in 2017 and 2018.
The Indian rupee gained further today and opened at over one year high at 65.40 per dollar, gain of 29 paise versus previous close o f65.69.
Mohan Shenoi of Kotak Mahindra Bank says US Fed delivered another dovish hike on Wednesday. Dollar saw a sell-off as markets reassess the number of hikes this year.
“The state election results have led to a rally in equity markets in India on the back of FII inflows which is positive for rupee. We expect the USD-INR to trade in a range of 65.15-65.45/dollar for the day,” he adds.
Asian markets were mixed, after the Bank of Japan held rates steady and the Federal Reserve raised rates.
