Market Live: Sensex hits 32000, Nifty eyes 9900 in opening after inflation data

10.11 am Market Check: Equity benchmarks continued to trade at record highs, with the Sensex holding its 32,000 level, backed by banking & financials, infra and FMCG stocks.

The 30-share BSE Sensex was up 223.29 points at 32,028.11 and the 50-share NSE Nifty rose 63.40 points to 9,879.50.

The broader markets also continued to trade in line with benchmarks, with the BSE Midcap up 0.7 percent as about two shares advanced for every share falling on the exchange.

Jayant Manglik, President, Retail Distribution, Religare Securities has reiterated bullish view on markets and suggests maintaining buy on dips approach.

TCS and Cyient will be in focus ahead of quarterly earnings later today.

10:00 am Earnings Estimates: According to average of estimates of analysts polled by CNBC-TV18, TCS’ profit in Q1 is seen falling 6.2 percent sequentially to Rs 6,195 crore and revenue may decline 0.2 percent to Rs 29,580 crore compared with previous quarter.

Dollar revenue growth during the quarter is expected to be 2.9 percent at USD 4,581 million QoQ; and constant currency growth is estimated to be around 2-2.5 percent, which may be lower compared with 3.1 percent in Q1FY17, 3.5 percent in Q1FY16 and 4.8 percent in Q1FY15.

Seasonally June quarter is always a strong quarter for the company but that is not likely to happen this time.

The key reason is expected recovery in BFS (banking and financial services) doesn’t seem to have materialised and structural challenges continued in retail, analysts said.

9:46 am Low inflation impact: Neelkanth Mishra of Credit Suisse said the decline in headline inflation has been much faster than expected.

It supports overweight call on beneficiaries of lower interest rates like mortgage providers and metals, he added.

At the same time, low food inflation could hurt consumption, according to him. The research house stayed underweight on staples, Mishra said.

9:35 am Buzzing: Shares of Specialty Restaurants, the operator of Mainland China chain of restaurants, soared nearly 5 percent intraday as investors cheered the company’s expansion plans.

“The company entered into a franchise agreement on July 11 with Resolute Restaurant Management LLC, granting the right to the Franchisee to open three franchise restaurants under its brand ‘Mainland China Asia Kitchen’ in the United Arab Emirates within the time stipulated in the Franchise agreement,” it told the exchanges in a notification.

Further, it added, that the restaurant will be opened in BurJuman Mall, New Wing, in Dubai, UAE.

“The Company will manage the day to day operations of restaurant and charge Franchise Fees and Management Fees, in accordance with the terms of the Franchise Agreement,” the exchange notification added.

9:25 am FII View: Sanjay Mookim of Bank of America Merrill Lynch said MSCI India trades at a large P/E premium to Emerging Market (EM) even though earnings growth is not materially higher. This is driven by consumer facing stocks and only partly explained by higher Indian return on equities.

There is also significant ‘faith’ foreign investors seem to have in the Indian consumption story, he feels.

He said Indian stocks have a ‘visibility premium’ rather than a ‘growth premium’.

“We measure this as the number of years of high return on equity built into consumer stock prices and with the recent rally that is also now at cyclical highs,” he said.

He feels there is little room for further upside, while market is susceptible to reversal of the global tide.

Mookim stayed cautious on market in the near term, saying December 2017 Sensex target is at 30,000.

Also read – Buy, Sell, Hold: 5 stocks and 1 sector that analysts are tracking today

9:15 am Market Check: Equity benchmarks started off the session with yet another record high on Thursday, with the Sensex gaining nearly 200 points and the Nifty inching towards 9,900 level on hopes of rate cut after fall in retail inflation and on positive global cues.

The 30-share BSE Sensex was up 189.99 points at 31,994.81 and the 50-share NSE Nifty rose 56.50 points to 9,872.60 on strong breadth.

About five shares advanced for every share falling on the BSE. Vedanta, Tata Steel, Tata Motors, SBI, Infosys and GAIL were early gainers.

The broader markets also participated in the rally, with the Nifty Midcap 100 up 0.5 percent.

HPCL surged more than 6 percent on hopes of big dividend before merger with ONGC.

Sintex Industries, HUDCO, AU Small Finance Bank, CDSL and Ujjivan Financial rallied 3-6 percent while PC Jeweller, Rico Auto and Biocon fell over a percent

India’s retail inflation cooled down to 1.54 percent in June from 2.18 percent in May, mainly due to goods and services tax-induced discounts. Core inflation rate was at 3.8 percent versus 4.2 percent month on month and food inflation came in at -1.17 percent versus -1.05 percent MoM.

Meanwhile, India’s industrial output also fell to 1.7 percent in May from 3.1 percent in April. However, April IIP was revised to 2.8 percent from 3.1 percent.
Most Asia markets advanced as markets parsed through Federal Reserve Chair Janet Yellen’s comments during her testimony before congress. Hong Kong’s Hang Seng, Australia’s ASX 200 and South Korea’s Kospi rallied 1 percent each.