The News International Team
1:45 pm Market outlook: Indian equities are done away with the Modi premium over the past three months and are back to focusing on high quality stocks with high earnings visibility, says Ridham Desai, Managing Director, Morgan Stanley. However, this skepticism is good for the bulls, he tells CNBC-TV18 in an interview.
Second quarter earnings season, which kicks off from October 10, will be watched out and sectors like healthcare, technology and consumer staples are likely to post strong growth, he adds. Once earnings are out of the way, the state elections will be market’s focus in the start of Q3. “The BJP is taking risks by going alone in Maharashtra state elections and the market is trying to price in this event. But any adverse election result for BJP in Maharashtra could be a negative cue for the market,” cautions Desai.
1:30 pm IT stocks rally: Shares of technology stocks are rallying as dollar gains strength. The rupee depreciated by 19 paise to trade at almost seven-month low of 61.94 against the US currency in early trade today on capital outflows amidst the dollar’s gain against other currencies overseas. The BSE IT index is up around 1.5 percent intraday.
IT stocks are also riding on the euphoria that the second quarter earnings will be better. Goldman Sachs says that Q2 is a seasonally strong quarter for Indian IT and current market expectations from some large-cap peers appear subdued.
“We expect 2QFY15E to witness 4.7 percent quarterly USD revenue growth versus 3.3 percent Q-o-Q growth in 1QFY15. USD revenue growth will be negatively impacted by 40-70 basis points due to cross currency impact mainly from negative 3.5 percent depreciation in euro,” it says in a report.
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The market continues to be in sluggish mode ahead of the long weekend. The Nifty is hovering around 7950, down 12.20 points at 7952.60. The Sensex slips 35.05 points at 26595.46. About 1162 shares have advanced, 1430 shares declined, and 115 shares are unchanged.
Wipro and Hero are up 2-3 percent. Other top gainers are Infosys, TCS and Coal India. Among the losers are Maruti, Tata Steel, GAIL, ONGC and ITC.
Gold extended losses to trade near a nine-month low and looked likely to break below the key USD 1,200-an-ounce level, clobbered by a stronger dollar and lack of support from top buyer China.
With the dollar at a four-year peak against a basket of major currencies, other precious metals also took a hit. Platinum tumbled to a five-year low, while silver retained sharp overnight losses to trade at its lowest since March 2010.
A stronger US currency makes dollar-denominated precious metals more expensive for holders of other currencies. Worries about an interest rate rise in the United States have also hurt gold, a non-interest-bearing asset.