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Nifty holds 7950; DLF slips further, rail stocks in demand

11:00

The News International Team

11:35am Market Expert

Gautam Chhaochharia, Head of India Research at UBS Securities, who was among the first to set Nifty target of 8000 for 2014-end, said the 50-share index has the potential to overshoot the mark.

He sees a 15-16 percent earnings growth in the medium term (over the next 2 years).

In its India Strategy note, UBS maintains a bullish view on Indian markets, though sees a possibility of near-term consolidation. It said that lower risk-free rates may support overall higher market valuations, but growth outlook remains critical for re-rating.

11:00am Equity benchmarks continued to see buying interest with the Sensex rising 89.69 points to 26649.84 and the Nifty climbing 24.20 points to 7960.25. Advancing shares outnumbered declining ones by a ratio of 1278 to 1064 on the Bombay Stock Exchange.
 
According to CK Narayan, founder and CEO, Growth Avenues, the way the evidence is shaping up on the charts of the indices as well as prominent stocks most definitely confirms that good times ought to continue.

“Looking at market cycles at the current juncture (end August), we find that a cycles based analysis suggests that the market should continue the upward path at least over the next two months and it is more than likely that the much anticipated 8000 levels would soon become part of history!,” he elaborates.

Shares of BPCL, Asian Paints, IDFC, Sesa Sterlite, GAIL, Tata Motors, BHEL, ICICI Bank, L&T and ONGC gained 1-2.7 percent whereas NTPC, Infosys, Tata Power, Cipla, SBI, Jindal Steel and Bank of Baroda lost 0.7-2 percent.

Realty major DLF fell more than 2 percent after the Supreme Court upheld the Competition Commission of India (CCI) order and asked company to deposit a penalty of Rs 630 crore imposed by CCI (in August 2011) within three months. UBS expects debt levels of the company to rise to Rs 20,000 crore by December 2014 versus Rs 19,000 crore in June.

Railway stocks like Texmaco Rail, Kalindee Rail, Titagarh Wagons, Stone India, BEML, Kernex Microsystems and Hind Rectifiers rallied 5-10 percent after the government notified the liberalised FDI norms for the railway infrastructure. The government permitted 100 percent foreign direct investment through automatic route in several areas, including high speed trains.

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