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Sensex, Nifty flex muscles; banks rally, FMCG stocks sulk


The News International Team
Live Market Commentary

1:50 pm FII view: Christopher Wood, CLSA says Greed & Fear’s formal view remains that investors should only overweight Asia and EMs if they have the ability to make a material overweight bet in India.

“The positive view on India, which remains our favourite stock market in Asia and EMs on a 5-year view, is worth re-iterating this week given a growing perception among investors that Prime Minister Narendra Modi is not living up to expectations,” he adds.

1:40 pm Auto expansion: South Korean carmaker Ssangyong Motor could set up a manufacturing plant in its biggest global market China if sales there rise to 50,000 vehicles a year, the brand’s sole China agent Pang Da Automobile Trade Co said.

Ssangyong, which is majority owned by Indian automaker Mahindra & Mahindra, expects to sell 50,000 vehicles in China a year by 2017 at the earliest, Pang Da, one of China’s biggest car dealers, said in a statement.

This year, Ssangyong expects sales of 20,000 vehicles in China, a more than three-fold jump from the 6,300 vehicles it sold a year ago.

Ssangyong Chief Executive Lee Yoo-il had raised the possibility of a joint-venture plant in China last month, Wang Yue, investor relations official at Pang Da, told Reuters.

1:30 pm Plan your holiday:  The second largest airline by market share, SpiceJet launched yet another limited period special fare scheme, ‘Early Bird’, offering customers ticket prices as low as Rs 499 on its domestic network.

The bookings for this three-day offer commences from today with a travel validity period between January 16 and October 24 next year, SpiceJet said in a release.

SpiceJet offers discounted flying options to destinations across the country, with one way fares starting as low as Rs 499 (including fuel surcharge but excluding applicable statutory taxes and fees), the release said. This sale will allow customers to enjoy low fares by planning their journey and holidays in advance. The sale offer is applicable on all direct, via and connecting flights on SpiceJet’s domestic network.

 1:20 pm Buzzing: Not only shares of oil marketing companies (OMCs) gained but even upstream companies (PSU) soared on Monday on hopes of zero diesel under-recovery to be a reality soon. HPCL , BPCL and IOC rallied 1.5-3 percent while ONGC and Oil India climbed 1.35 percent intraday. Government today said the under-recovery on high speed diesel (HSD) applicable for first fortnight of September effective today will go down to Rs 0.08 per litre.

This was Rs 1.78 per litre during second fortnight of August 2014. Gradual increase in diesel price and stable oil prices in international market pushed the diesel under-recovery near zero. During the same period, PDS kerosene and domestic LPG under-recoveries will be Rs 32.67 per litre (Rs 32.98 per litre in last fortnight) and Rs 427.82 per cylinder (Rs 447.87 per cylinder in last fortnight), respectively.

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Strong rally continues on Dalal Street with major support by banks, capital goods and oil & gas stocks. The Sensex is up 195.94 points or 0.7 percent at 26834.05 and the Nifty is up 60.85 points or 0.7 percent at 8015.20. About 1757 shares have advanced, 972 shares declined, and 123 shares are unchanged.

Hero MotoCorp, Maruti, L&T, Cipla and Coal India are top gainers in the Sensex. Among the top losers are in the Sensex, Sun Pharma, Tata Motors, Sesa Sterlite, ITC and BHEL.

Mid-cap state-run banks gain as investors unwind short positions. Traders cite better-than-expected GDP data. RBI Chairman Rajan’s comments noting bad loan are not “scary” also cited as a reason.

Indian shares could fall to correct about 5 percent over the next two months, Bank of America-Merrill Lynch says in a note. BofA-Merrill says pace of reforms are “slower” than expected but adds it still expects India’s earnings to double over the next 4-5 years. Mean reversion of corporate profits to GDP are among other indicators. It adds auto, cement and energy sectors will drive earnings rebound.


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