Market Live: Banks lift Sensex 350 pts post India#39;s rating upgrade; Realty spikes

2:05 pm Niti Aayog on rating upgrade: India’s credit rating upgrade by

Moody’s is a reflection of the country’s growth story, Niti Aayog Vice Chairman Rajiv Kumar said today and expressed hope that other global agencies such as S&P and Fitch would follow suit.

The US-based Moody’s upgraded India’s sovereign rating after a gap of 13 years to Baa2, with ‘stable’ outlook, from Baa3 earlier, citing improved growth prospects driven by economic and institutional reforms.
Former Economic Affairs Secretary Shaktikanta Das said in

a tweet: “Moody’s upgrade India’s credit rating after 13 years. A clear recognition of economic & institutional reforms; well paced shift towards formalisation of the economy; improvement in business climate;positive growth outlook.”

In 2015, the rating outlook was changed to ‘positive’ from ‘stable’.

The ‘Baa3’ rating was the lowest investment grade — just a notch above ‘junk’ status.

Here are the top headlines at 2 pm from Moneycontrol News’ Anchal Pathak

1:56 pm Delay in debt repayment: Telecom operator Aircel has delayed payment of interest on its debt obligations, ratings agency CARE said and downgraded its rating on the company’s bank facilities to default.

Aircel, the sixth-ranked mobile carrier in the country by subscribers, has delayed payment of interest on its debt obligations on account of its “weak liquidity position,” CARE said in a November 16 note.

Aircel, 74 percent owned by Malaysia’s Maxis Communications Bhd, had plans to combine operations with rival carrier Reliance Communications’ (RCom) wireless unit. That deal fell apart last month.

Aircel has long-term bank loans of Rs 17,479 crore (USD 2.7 billion), CARE said.

1:48 pm Market Update: It is a big thumbs up to Modi government’s reform drive. Moody’s upgraded India’s sovereign rating to Baa2 and changed the outlook to stable from positive.

The 30-share BSE Sensex rallied 342.29 points or 1.03 percent to 33,449.11 and the 50-share NSE Nifty gained 103.40 points or 1.01 percent at 10,318.20.

About two shares advanced for every share falling on the BSE.

Nifty Bank index surged 450 points but IT stocks remained under pressure. The broader also participated in rally, with the Midcap rising a percent.

Realty is the biggest gainer among sectoral indices, up 4.5 percent.

1:36 pm FM on India’s rating upgrade: Finance Minister Arun Jaitley said the government welcomes Moody’s upgradation of India’s sovereign rating.

In a press address following the upgrade, the finance minister said the upgradation is a belated recognition of all the positive steps the Centre has taken so far.

It is “encouraging to have international recognition” and “not something happening in isolation,” he said.

The steps taken by the government in the last few years have contributed to the strengthening of the Indian economy, and the upgradation is an endorsement of the ongoing reform process, he said.

He added, the number of structural reforms that have taken place in the last three to four years have placed India “on path of a high trajectory growth”.

On mention of India’s fiscal prudence in the Moody’s report, Jaitley said “India continues on the path of fiscal prudence which has brought stability to the economy.”

1:27 pm Market Outlook: “The long awaited rating upgrade after the number of policy measure taken by the government of India did finally came, the ratings upgrade is likely to have a positive effect not only on equity but also on rupee and bond. The bold policy measures of the government would enhance India’s growth potential,” Dinesh Jain, MD, AUM Capital said.

Moody’s Investor Services upgraded the Government of India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.

The ratings upgrade is a recognition of long term growth and is likely to decelerate the selling by foreign investors. Moreover many new investors might start looking towards India as an attractive and stable investment destination. Secondly, this might lead to a lower cost of borrowing for corporates planning to raise funds, Jain said.

1:15 pm Management Interview: The Cipla stock is in focus and gaining in trade after news of the US FDA approving Pulmicort Respules – an asthma drug.

Umang Vohra, MD & Global CEO, Cipla said the approval is limited in nature. He said there is an IP situation around Pulmicort, which will get resolved sometime in 2018 and so, there could be further competition coming in as well.

However, he specified that it is a product candidate which is of Form Fill Seal (FFS) solution – actually a suspension product and is difficult to make. There are not many facilities in the world that make it and so we think the competition is limited.

He said the competition could be doing close to USD 15-20 million in terms of revenues and so they would also roughly be in that range.

12:55 pm Market Check: The rally continued at Dalal Street as the Sensex surged 336.84 points or 1.02 percent to 33,443.66 after Moody’s upgraded India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive after a long gap of 13 years.

The Nifty also continue to trade above the 10,300-mark, rising 104.20 points or 1.02 percent 10,319.00.

Nifty Bank rallied over 400 points, backed by the rating upgrade. ICICI Bank, Yes Bank, PNB, Canara Bank, SBI and IDFC Bank gained 2-3 percent while Reliance Industries, ITC and Tata Motors rose over a percent.

12:50 pm Rupee Update: The Indian rupee trimmed its gains in afternoon, trading with 41 paise gains at 64.91 against the US dollar.

It touched an intraday high of 64.62 a dollar after opening at 64.75.

12:40 pm Buzzing: Ashapura Minechem shares rallied 7 percent after ace investor Porinju Veliyath’s Equity Intelligence has bought 7.4 lakh shares of the company via open market transaction.

Equity Intelligence holds 5.35 percent stake in the company after this share acquisition.

12:30 pm Most Active shares: New entrant HDFC Standard Life was the most active stock on exchanges, rising nearly 20 percent over issue price of Rs 290 per share.

SBI, Indiabulls Housing, PNB, Page Industries, HDFC, ICICI Bank and Bharti Airtel were other most active shares.

12:20 pm Management Interview: HDFC Life has been created with a very different business model and investors believe this model is more sustainable and balanced, Amitabh Chaudhry, MD & CEO, HDFC Standard Life said in an interview to CNBC-TV18.

HDFC Standard Life has raised Rs 8,695 crore through public issue, including Rs 2,322 crore via anchor book.

“We went for a secondary sale as HDFC Life did not need any money. There is no requirement for capital currently,” he said.

Promoters will be happy to infuse more capital if required, he added.

12:10 pm Corporate reaction on India’s rating upgrade: “Moody’s ratings upgrade is a testimony of the fact that the government’s road map of fiscal reforms is on the right path. This global recognition is a positive step for overall Indian economy and it will also help in attracting global inflows into India. The rating upgrade will also provide relief to corporates on their borrowing costs,” George Alexander Muthoot, MD, Muthoot Finance said.

12:05 pm Rating agency Moody’s has upgraded four Indian financial institutions’ ratings today.

It has upgraded long-term ratings of HDFC Bank, SBI to Baa2 from Baa3 and also changed outlook on both banks to stable from positive.

Here are the top headlines at 12 pm from Moneycontrol News’ Anchal Pathak

11:59 am Buzzing: Shares of Gati rose 7 percent intraday after second quarter earnings.

The company has recorded 179 percent jump in its Q2 net profit at Rs 20.77 crore against Rs 7.44 crore.

Revenue decreased 4.6 percent at Rs 405.97 crore against Rs 425.65 crore.

11:45 am Market Update: Equity benchmarks as well as broader markets maintained early gains, with the Sensex rising more than 300 points after Moody’s upgraded India’s sovereign rating. The rally was driven by banks and metals.

The 30-share BSE Sensex was up 335.96 points or 1.01 percent at 33,442.78 and the 50-share NSE Nifty rose 102.20 points or 1 percent to 10,317.

The gap between advances and declines narrowed a bit. About three shares advanced for every share falling on the BSE. The ratio was 5:1 in early trade.

Technology stocks were under pressure on rising rupee against US dollar.

HDFC twins, ICICI Bank, Reliance Industries, ITC were leading contributors to Nifty’s gains, rising 1-3 percent.

HDFC Life extended gains, rising 17 percent over issue price.

11:34 am Market Outlook: “Moody’s upgrade comes as a welcome move in the wake of slew of structural reforms in the economy which are expected to enhance the potential growth in the medium term,” Upasna Bhardwaj, Senior Economist at Kotak Mahindra Bank said.

In the near term, however, given that debt limits are nearly utilised there remains minimal room for a rally in G-Sec. Further, inflows in equity markets ( which will be positive Rupee )will also increase domestic liquidity and hence increase quantum of open market operations sales, which will further weigh on bonds. Notably, higher crude oil prices and risk of fiscal slippage is already weighing on bonds, she added.

11:25 am Buzzing: Shares of Vascon Engineers added 6.4 percent intraday on the back of sale of subsidiary’s Mumbai division.

The board of directors of GMP Technical Solutions, a material subsidiary of Vascon Engineers has approved slump sale of its Mumbai division.

The company signed a business transfer agreement on November 16 with Innovative Core Systems (acquirer) to sell and transfer its stake held in Mumbai division for a consideration of Rs 18 crore.

11:20 am FII View: Moody’s Investors Service upgraded the Government of India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.

In an interview to CNBC-TV18, Suresh Ganapathy, Banking Analyst, Macquarie Capital Securities said it takes some time for this to flow into the system and the immediate impact could be seen on the well-rated corporates and create a base for lower margin structure for banks because these corporates can bargain and get a low interest rate on their borrowings.

However, the corporate which are under the NCLT or where some resolution of bad debts is happening, it will not move the needle for them in a big way.

11:15 am Big Bull on India’s rating upgrade: Ace investor, Rakesh Jhunjhunwala, the partner of Rare Enterprises said that the rating upgrade by Moody’s earlier today did not come as a surprise to him but it will be for those who were criticizing efforts made by the Modi government to revive the economy.

I see the economy growing by 7.5-8 percent by next year. Most importantly, it is a recognition of the fact that however disruptive in the short term the measure were, all the actions which the govt. took were correct, bold and required, he said.

It will lead to faster economic growth in times to come. “This upgrade is also in recognition by the Moody’s that there is not going to be some big havoc on the fiscal side, and the direction which the government is undertaking is going to lead to higher economic growth and it is also a befitting reply to critics of Modi govt.,” said Jhunjhunwala.

11:08 am SEBI on Earnings: The Securities and Exchange Board of India (SEBI) will investigate possible leaks of company earnings in social media chatrooms, its chief Ajay Tyagi said.

A Reuters investigation documented at least 12 cases of prescient messages about major Indian companies being posted in private WhatsApp groups.

“We will certainly investigate the issue. It is a work in progress,” Tyagi, Chairman of SEBI, India’s market regulator, told Reuters, when asked what action the regulator was considering.

10:59 am Gold Update: Gold prices fell by Rs 103 to Rs 29,560 per 10 ten grams in futures trading today as participants indulged in profit-booking at prevailing levels even as the metal strengthened overseas.

At the Multi Commodity Exchange, gold for delivery in far-month February declined by Rs 103, or 0.35 per cent to Rs 29,560 per 10 grams in a business turnover of 100 lots.

Similarly, the metal for delivery in December eased by Rs 88 or 0.30 per cent to Rs 29,415 per ten grams in 863 lots.

Analysts attributed the fall in gold futures to profit-booking by traders at existing levels but a firm trend in global market, capped the fall.

10:40 am HDFC on India’s Rating Upgrade: Moody’s has upgraded India’s sovereign rating to Baa2 from Baa3.

“It is a great move. The initiatives that the government has taken in the recent times in the various things starting with demonetisation, goods and services tax (GST), real estate regulatory authority (RERA) are taking its effect and rating agencies are now beginning to recognise India’s potential,” Keki Mistry, Vice Chairman and CEO of HDFC said in an interview to CNBC-TV18.

According to him, foreign borrowing might be a little bit cheaper now. “My sense is if we were to go to the overseas markets to raise money, it would probably be a little cheaper,” he added.

10:30 am Market Update: Equity benchmarks maintained opening gains, led y banks after Moody’s rating in a surprise move upgraded India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive after a long gap of 13 years.

The reform program will complement the existing shock-absorbance capacity provided by the country’s strong growth potential and improving global competitiveness, the rating agency said.

The 30-share BSE Sensex was up 361.16 points or 1.09 percent at 33,467.98 and the 50-share NSE Nifty rose 112.40 points or 1.10 percent to 10,327.20.

About 1693 shares advanced against 474 declining shares on the BSE.

10:20 am Buzzing: Just Dial shares gained 4.5 percent as Nomura has maintained its buy rating on the stock with increased target price at Rs 635 from Rs 590 per share.

Just Dial remains the most cost-effective SME advertising platform in India, with scope for coverage expansion in tier 2/3 cities, the research house said while expecting an EPS to grow at CAGR of 19 percent over FY17-20 and revenue CAGR of 10 percent over FY17-19

Improved traffic growth trends, stable realisations and operational efficiencies are key positives, it feels.

Nomura said the company has now renewed focus on its core search business, but competition from Google or vertical players is an issue.

10:10 am Cipla rallies: Shares of Cipla rose more than 2 percent in the early trade on the back of USFDA approval for Budesonide Inhalation Suspension.

The company has received final approval for its abbreviated new drug application (ANDA) for Budesonide Inhalation Suspension, 0.25mg/2mL, 0.5mg/2mL, and 1mg/2mL from the United States Food and Drug Administration (USFDA) to market a generic version of Astrazeneca’s Pulmicort Respules.

Budesonide Inhalation Suspension is indicated for the maintenance treatment of asthma and as prophylactic therapy in children 12 months to 8 years of age.

Here are the top headlines at 10 am from Moneycontrol News’ Anchal Pathak

10:00 am Listing: HDFC Standard Life Insurance Company shares listed with 8 percent premium on the National Stock Exchange, driven by positive market conditions and good subscription.

The share price opened at Rs 313 per share against issue price of Rs 290.

9:58 am Buzzing: Share price of Bank of Baroda surged 5 percent in morning as the company is planning to raise Rs 6000 crore.

The meeting of the designated board committee i.e. Finance Committee of the board will be held on November 21, 2017 to consider and approve raising of equity fund, as per company release.

The equity fund can be raised through qualified institutions placement (QIP), and/or rights issue for size and amount as may be decided, within overall approval of the board of raising equity capital up to Rs 6000 crore, it added.

9:51 am Pre-opening: HDFC Standard Life Insurance Company has settled at Rs 310 on the National Stock Exchange in pre-opening trade, higher by 6.89 percent over issue price of Rs 290 per share.

9:47 am Bhushan Steel in action: Luxembourg-based multinational steel firm ArcelorMittal and domestic industry major Tata Steel have evinced interest in Bhushan Steel which is undergoing insolvency proceedings.

The development has come at a time when the debt-laden firm, which was referred to NCLT by the RBI under the Insolvency and Bankruptcy Code, has reported narrowing down of its standalone net loss to Rs 467.37 crore during the September quarter from Rs 980.22 crore in the same period a year ago.

During the July-September 2017, total income of Bhushan Steel rose 43 percent to Rs 4,325.60 crore from Rs 3,025.79 crore during the same period a year ago, the company said in a BSE filing.

9:43 am Stake Buy: Commercial vehicle maker Ashok Leyland has inked a pact with Everfin Holdings to buy an additional 5 percent stake in Hinduja Leyland Finance Limited (HLFL) for Rs 225.42 crore. The company has entered into a share purchase and shareholder agreement with Everfin Holdings, shareholder of HLFL, for the acquisition of 2,04,92,676 shares of Rs 10 each constituting 4.68 percent share capital of HLFL at a price of Rs 110 per share, Ashok Leyland said in a regulatory filing.

“Consequent to the above, the company’s shareholding in HLFL will increase from 57.22 percent to 61.9 percent,” it added.

9:40 am Listing: HDFC Standard Life Insurance Company, which recently concluded its Rs 8,695-crore initial public offering, is likely to list a a slight premium when it debuts on the stock market debut today, experts said.

Although analysts are not expecting a blockbuster listing, a small premium to the issue price could well be on the cards thanks to the quality of its earnings and management pedigree.

The IPO, which was opened for subscription during November 7-9, was subscribed 4.89 times at a price band of Rs 275-290 per share.

9:36 am RIL in focus: Reliance Industries (RIL) is set to raise up to $ 1.8 billion through a combination of offshore bonds and syndicated loans to reduce its high-cost debt, reports The Economic Times. The company would pare borrowing costs with a new series of overseas papers that would be of 10-year maturity, unlike the perpetual bonds it had sold five years ago, sources said.

RIL is raising $ 800 million through a dollar-bond issue, and another $ 1billion through syndicated commercial loans from a group of international lenders at a cost lower than that for the existing loans. The issuance is part of a massive debt refinancing exercise by the Mukesh Ambani-owned company, and would cover a perpetual bond sale of 2013.

Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

9:26 am Rupee and Bond Update: The Indian rupee as well as 10-year government bond yields were strong in early trade.

The rupee was trading at 64.79 against US dollar, higher by 52 paise over previous close.

It has opened with the biggest gain in four years against previous close.

The 10-year government (6.79%, 2027) bond yield opened at 6.94 percent, much higher compared with previous day’s closing level of 7.06 percent.

9:20 am Gainers and Losers: ICICI Bank, HDFC, Reliance Industries, Vedanta, SBI, Axis Bank, L&T, Tata Motors and HUL gained 1-3 percent while Infosys, TCS, Tech Mahindra, HCL Technologies and Wipro were under pressure, falling up to 1 percent.

9:15 am Market Check: Bulls continued to keep tight control over Dalal Street for second consecutive session as the Sensex rallied nearly 400 points, driven by banks after Moody’s upgraded the Government of India’s local and foreign currency issuer ratings.

The 30-share BSE Sensex was up 396.36 points or 1.20 percent at 33,503.18 and the 50-share NSE Nifty gained 117.10 points or 1.15 percent at 10,331.90.

Nifty Bank hit fresh record high as Moody’s Investors Service has today upgraded the Government of India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.

Moody’s has also upgraded India’s local currency senior unsecured rating to Baa2 from Baa3 and its short-term local currency rating to P-2 from P-3.

The decision to upgrade the ratings is underpinned by Moody’s expectation that continued progress on economic and institutional reforms will, over time, enhance India’s high growth potential and its large and stable financing base for government debt, and will likely contribute to a gradual decline in the general government debt burden over the medium term.
Vijaya Bank, PNB, Bank of Baroda, IDBI Bank, Just Dial, Edelweiss Financial, Petronet LNG, Suzlon Energy, Religare Enterprises, L&T Finance, Indiabulls Real, DLF, Nitesh Estates and Puravankara rallied 2-10 percent.