Sensex, Nifty post record close ahead of RBI policy meet; GST rates lift Titan 17%
Equity benchmarks managed to end the range-bound session at record closing highs on Monday after clearance came from GST Council to pending rules and ahead of Monetary Policy Committee meeting.
The 30-share BSE Sensex rose 36.20 points to 31,309.49 and the 50-share NSE Nifty gained 21.60 points at 9,675.10.
Experts continue to feel the market is highly valued at current levels as it rallied 17 percent so far in 2017 that is ahead of fundamentals but they still expect it to inch higher.
Benchmark indices hit fresh record highs almost on a regular basis for the last 2 months, which made the ‘Nawab of D-Street’, nervous about valuations but not bearish, Ramesh Damani, Member BSE, told in an exclusive interview with CNBC-TV18.
“I am not bearish, but watchful about the market at this point in time. There is some froth in the valuations of mid & smallcap companies which have run ahead of fundamentals. But, I am still a buyer as I am 95 percent invested in the market,” he said.
VK Sharma, Head (PCG) at HDFC Securities, expects the Nifty to move higher and seek levels of 9800 as GST Council cleared pending rules. The RBI is likely to sound more accommodative in the forthcoming policy and likely Fed rate hike in June will be easily absorbed.
The broader markets also maintained momentum, with the BSE Midcap index rising 0.15 percent and Smallcap up 0.65 percent. About 1445 shares advanced against 1258 declining shares on the exchange.
Nifty Bank also ended at record closing high, up 0.4 percent supported by Yes Bank (up 2.6 percent), Axis Bank (up 1 percent) and ICICI Bank (up 0.5 percent).
The upside in ICICI Bank was also after the board of directors approved a sale of part of its stake in ICICI Lombard through public issue. Fairfax will also divest stake in the company.
Nifty Pharma snapped four-day gaining streak, down 0.3 percent dragged by Lupin, Dr Reddy’s Labs and Sun Pharma. Lupin was under pressure as USFDA in its observations said company’s Indore facility failed to review discrepancies in products and operations did not have written norms for manufacturing process. US FDA inspected Lupin’s Indore unit on May 8-19.
Wipro shares advanced 0.66 percent after sources told Moneycontrol that its promoters are in the early stages of evaluating sale of the company or some of its units and have approached investment banks to arrive at fair value.
Coal India fell nearly 2 percent as CLSA slashed its target price on the stock to Rs 240 from Rs 245 following cut in FY18-19 EPS estimates by 14-15 percent. While retaining a sell call, it believes earnings downgrades are not over yet. It expects operating performance to remain weak in FY18.
Among others, TCS, L&T, HUL, Bajaj Auto, Adani Ports and ONGC gained 1-2 percent whereas Infosys, HDFC, ITC, Hero Motocorp and GAIL were down 0.5-1 percent.
Jewellery stocks rallied on lower-than-expected GST rate (at 3 percent) fixed by GST Council on June 3. PC Jeweller, Gitanjali Gems and Tribhovandas Bhimji Zaveri gained 3-9 percent.
Titan Company spiked 17 percent amid high volumes. CLSA upgraded the stock to buy from outperform earlier and has also raised its 12-month target price to Rs 620 from Rs 555 earlier as the Goods & Services Tax rate was lower than expectations which removed an overhang from the stock.
Housing financial firms Indiabulls Housing and DHFL gained 3-4 percent while infrastructure stocks like MEP Infrastructure, MBL Infrastructures and RPP Infra surged 6-16 percent.
Tata Elxsi rose 10 percent on signing licensing and integration support deal with one of the world’s top five original equipment manufacturers (OEMs) for driverless car R&D.
On the global front, European markets were lower as investors eyed an upcoming monetary policy meeting from the European Central Bank. France’s CAC and Britain’s FTSE down 0.3-0.6 percent at the time of writing this article. Asian indexes also closed lower after London attack.
