Market Live: Midcap, Smallcap outperform Sensex; Aurobindo top gainer

11.20 am Market Check: Benchmark indices continued to be volatile in morning trade, with the Nifty hovering around 9600 level after digesting Federal rate hike.

The 30-share BSE Sensex was down 14.45 points at 31,141.46 and the 50-share NSE Nifty fell 16.65 points to 9,601.50.

The market breadth turned strong as about 1,359 shares advanced against 903 declining shares on the BSE.

Reliance Industries was the biggest contributor to Sensex’ gain again, up 1.5 percent. Healthcare stocks were buzzing as Sun Pharma, Lupin, Dr Reddy’s Labs, Cipla and Aurobindo Pharma surged 1-6 percent.

11:00 am Buzzing: Inditrade Capital share price hit a 52-week high of Rs 59.20, rallying 20 percent intraday after the wife of ace investor Porinju Veliyath picked up a stake in the company.

As per bulk deals data on the Bombay Stock Exchange, Shilpa Porinju Veliyath has purchased 1.42 lakh equity shares (representing 0.6 percent of total paid up capital) at Rs 45.74 per share.

Foreign portfolio investors also have 2.84 percent shareholding in the company, out of which 2.16 percent stake is held by CLSA Global Markets as of March 2017.

Incorporated in 1994, Inditrade Capital (formerly known as JRG Securities) is engaged in equity and commodity broking businesses, with strong presence in South India.

10:45 am SAMCO on Fed rate hike: Irrespective of the short term knee jerk reaction, there is no direct correlation between interest rates hikes and adverse stock market reactions, Jimeet Modi, CEO, SAMCO Securities feels.

For example: During Dow’s bull journey in 1994 to 1995 the interest rates were increased from 3.75 to 5.75 over a period of 15 months – 18 months wherein still the Dow rose from 3500 to 5000 by December 1995. There are many instances wherein no such meaningful correlation is found.

However when interest rate hikes reaches an extreme in the range of 5-6 percent, that’s the time US markets have cranked substantially. Thus there is more room for interest rate hikes from the current 1 percent which may not impact the markets in the short term. But if the US market succumbs to deep sell off, Indian market too will be adversely impacted, Jimeet Modi said.

10:25 am Buzzing: Repco Home Finance shares rallied as much as 4.4 percent intraday after the housing finance company raised Rs 272 crore from the World Bank subsidiary.

“Securities allotment committee of the board of directors, on June 14, has approved the allotment of 2720 secured, redeemable, non-convertible, non-cumulative debentures (SRNCD) of face value of Rs 10 lakh each aggregating to Rs 272 crore on private placement basis to International Finance Corporation,” the company said in its filing.

Repco raised funds at the rate of 8.05 percent on a semi-annual basis, for a tenure of 7 years. The fund allotment date is June 14, 2016 and maturity date would be May 18, 2024.

These debentures are rated as AA by rating agency CARE and are secured by book debts & pari-passu charge on immovable property.

10.07 am Market Check: The broader markets outperformed equity benchmarks after Federal Reserve hiked interest rate by 25 basis points to 1.25 percent, which was on expected lines.

The 30-share BSE Sensex was up 18.30 points at 31,174.21 and the 50-share NSE Nifty fell 12.25 points to 9,605.90.

The BSE Midcap index was up 0.2 percent and Smallcap gained 0.5 percent on positive market breadth. About 1,148 shares advanced against 713 declining shares on the BSE.

Aurobindo Pharma was top gainer among Nifty stocks, up 3.5 percent followed by NTPC, Adani Ports, Bharti Airtel, Dr Reddy’s Labs and Sun Pharma whereas GAIL, Coal India, Asian Paints, TCS, L&T, Bank of Baroda and BPCL were under pressure.

9:59 am Market Outlook: The Federal Open Market Committee (FOMC), the policy making arm of the US Federal Reserve, hiked its rates on expected lines, by 25 basis points.

The FOMC also said that it will begin reducing its USD 4.5 trillion balance sheet this year.

VK sharma, Head – Private Client Group, HDFC Securities feels the US Fed statement is apparently hawkish.

While the FOMC has laid out a plan to reduce its balance sheet size, it has not said when they would begin reducing the balance sheet, Sharma said.

The yields on the 10-year have risen yesterday in the US. Crude has fallen afresh. This should further help Indian markets, he feels.

9:45 am Stake sale: Shipping Corporation of India shares hit a 52-week high of Rs 92, up as much as 16 percent in morning trade after NITI Aayog recommended the government to cut stake in the company by 38.75 percent.

The NITI Aayog has drafted a recommendation which proposes to bring down the government’s stake in the company to 25 percent from current 63.75 percent. The deal could potentially earn the government around Rs 960 crore for the exchequer.

The recommendation will soon be sent to cabinet committee of economic affairs.

NITI Aayog has recommended the Ministry of Shipping to divest stake in SCI in multiple tranches.

Government should sell 26 percent stake in SCI in first round and subsequently, government should transfer management control, it said in its draft.

9:30 am FII View: Mahesh Nandurkar of CLSA said analysis of agri stress indicates that Tamil Nadu, Karnataka and Haryana may follow up with farm loan waivers, taking the total farm loan waivers to about USD 28 billion from USD 10 billion.

Assuming these are staggered over five years, the annual rise in consolidated fiscal deficit works out to 25 bps of GDP. Else, other developmental expenditure would be compromised, potentially softening a capex cycle upturn, he added.

He feels this would dampen investor sentiment on PSU banks and NBFCs.

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9:15 am Market Check: Equity benchmarks started off trade on a flat note again, as investors digested 25 basis points rate hike by Federal Reserve in its latest policy meeting.

The 30-share BSE Sensex was up 18.21 points at 31,174.12 and the 50-share NSE Nifty fell 7.65 points to 9,610.50.

Reliance Industries extended gains, up 0.75 percent on top of 3 percent rally in previous session.

Adani Ports, ITC, Bharti Airtel, Tata Motors, Hero Motocorp and ONGC were others gainers while TCS, L&T, ICICI Bank, Infosys and HDFC were under pressure.

In midcap space, City Union Bank, PNB, IDBI Bank, Bhushan Steel, Balaji Telefilms and Prism Cement were down over a percent while Ginni Filaments surged nearly 12 percent. Emkay Global was up 5% and SPARC gained 4 percent.

Shipping Corporation of India rallied 12 percent on stake sale buzz.

Meanwhile, the Indian rupee opened marginally higher at 64.27 per dollar versus previous close of 64.30.

Mohan Shenoi of Kotak Mahindra Bank said as expected, US FOMC hiked the rate by 25 bps, hinting one more rate hike in 2017. As the event was already priced-in, global currency market reaction was muted.

He expects the rupee to trade in a range of 64-64.35/dollar today.
Asian equities turned cautious after the US Federal Reserve raised interest rates for the second time this year, as was widely expected by markets. Hong Kong’s Hang Seng and Australia’s ASX 200 slipped over a percent.