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Nifty breaks 7900; Infosys rebounds, Tata Motors rises

11:00

The News International Team

11:55am Interview

All tyre stocks have been buzzing of late after a fall in rubber prices, which dipped as low as Rs 95 a kg in September, after hitting a 44-month low. In an interview to CNBC-TV18, Koshy Vargheese, Executive Vice-President – Marketing at MRF, said the fall in rubber prices have come post a slide in crude oil prices.

He said the slowdown in demand in China has contributed to softening of rubber prices, but feels the sustainability of pick-up in demand will be known post-Diwali.

Typically for MRF, the positive impact of correction in rubber prices is felt with a quarter’s lag. The recent correction in prices and stable pricing scenario in the replacement market bode well for margins across players.

MRF has been able to manage better margin profile compared to its peers due to higher share of replacement market, balanced product portfolio and premium pricing across most segments.

Vargheese said that typically the company maintains inventory levels of one month and feels that if the current trend in auto industry continues, “it would be a fair assumption that 9-10 percent revenue growth may not be off the mark”.

11:40am DQ Entertainment in News

Shares of DQ Entertainment International rallied 11 percent on signing major content deal with Ciwen Media Group in China.

“DQ Entertainment and Ciwen Kids of Ciwen Media Group signed a significant content acquisition deal of multiple properties produced by DQE for distribution in Greater China, which includes Mainland China, Hong Kong and Macau,” said the company in its filing.

DQ Entertainment is the global entertainment production and distribution company, specialising in animation, gaming and VFX content production, licensing and distribution.

Beijing-based Ciwen produces and distributes media content including TV dramas and motion pictures.

11:20am FII View

Robert Buckland, Citi says economic data is generally supportive of a more pro-growth angle in Asia. “Investors however, remain concerned about the growth rate of the Chinese economy. These periodic concerns have room to cause market weakness in Asia,” he adds.’

“Outside of China, the main risks are the effects of a stronger USD and higher US rates in 2015. India will gain fiscally from weaker commodity prices. Overall, Asia is a beneficiary of weaker commodity prices,” says Buckland.

11:00am Market Check

The market remained under pressure weighed down by index heavyweights like HDFC twins and ITC. The Sensex fell 154.24 points to 26413.75 and the Nifty declined 52.15 points to 7893.40.

About 1130 shares have advanced, 1235 shares declined, and 114 shares are unchanged.

Metal stocks are weak as global growth concerns weigh. The World Bank has cut China’s growth forecast for the next 3 years – estimate is 2015 growth will be 7.2 percent, 7.1 percent in 2016 versus a previous forecast of 7.5 percent for both years.

Other frontline stocks in focus include Tata Motors (up 1.5 percent) that saw buying despite weak September sales, Mahindra and Mahindra (down 2 percent) as Mahindra 2 wheelers bids to acquire 51 percent stake in Peugeot Motorcycles.

Infosys reversed earlier losses reacting to Jack Palmer (former employee) suing the company again. DLF lost nearly 3 percent as Prime Minister Narendra Modi yesterday said the Election Commission should take appropriate action over the Haryana government’s approval of DLF and Robert Vadra land deal

From the broader markets, Mphasis declined 2 percent after Macquarie downgraded the stock to underperform. TVS Motor and Ashok Leyland gained 1 percent and 3 percent, respectively post September sales numbers.

Ballarpur Industries rallied 11 percent as IFC will invest USD 100 million in BILT’s arm while Apollo Tyres rose 6 percent after the RBI said foreign investors can buy upto 45 percent in the company.

Brent crude fell to over two-year lows while FIIs started month of October on negative note with a sell figure of Rs 63 crore on last Wednesday. This comes after September saw the lowest FII flows in seven months.

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