The News International Team
9:55 am Expert take: The gas price hike is broadly positive, but the market is unlikely to be excited about it because the quantum is much lower than what it was expecting, feels Mehraboon Irani of Nirmal Bang Securities. In addition to the BJP not getting an absolute majority in a key state like Maharashtra, the market is also likely to be disappointed at the government playing it safe on key reforms such as gas price hike feels Irani.
In an interview to CNBC-TV18, Irani says he is bullish on oil marketing companies because of diesel price deregulation. He is bullish also on telecom stocks, which he feels are now available at attractrive valuations. Speaking in the same discussion, Sandip Sabharwal of asksandipsabharwal.com said the market has most likely seen its peak for this year given both domestic and global headwinds.
9:35 am Buzzing: Shares of UltraTech Cement rose 5 percent intraday. The Aditya Birla Group company beat street expectations on every parameter with the second quarter standalone net profit soaring 55.24 percent to Rs 410 crore on strong topline, operational and other income but impacted by finance, power and freight cost. Profit in the year-ago period was Rs 264.1 crore.
Profit was expected at Rs 338 crore on revenue of Rs 5,150 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Revenue during the quarter grew by 20 percent to Rs 5,429 crore in the quarter ended September 2014 compared to Rs 4,523 crore in same quarter last year driven by higher cement sales volumes.
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Boosted by fuel stocks, the market has opened on a strong note. The Sensex is up 341.55 points or 1.3 percent at 26450.08 and the Nifty is up 112.70 points or 1.4 percent at 7892.40.
About 532 shares have advanced, 74 shares declined, and 9 shares are unchanged.
The government has begun with the mother of all reforms. It has raised the gas prices to USD 5.6 per unit effective from November with a review every six months. Also, in a huge boost to public sector oil companies, diesel price deregulation finally sees the light of the day. Government has deregulated the price of diesel, linking it to global market prices. Diesel has now become cheaper by Rs 3.37.
ONGC is up 7 percent while Axis Bank, ICICI Bank and Tata Motors are top gainers in the Sensex.
The Indian rupee advanced in the early trade. It has opened higher by 24 paise at 61.20 per dollar against 61.44 Friday. Dollar gained after upbeat data restored some calm to the financial markets, prompting equities to rally back from deep losses and triggering a rise in treasury yields.
Agam Gupta of Standard Chartered said, “The diesel price decontrol and the state election results will support risk appetite. Expect exporters to sell on upticks to 61.35-61.40/dollar and local government banks to be buyers of USD on dips towards 61.05-61.10/dollar. Expect the rupee to trade in the range of 61.05-61.40/dollar,” he added.
It was a massive victory for the BJP in Maharashtra. It came out as the single largest party in the state with 123 seats in Haryana.It created a record getting majority on its own in Haryana assembly winning 47 seats.
US stocks rallied, softening a fourth week of losses, as investors bet on further stimulus from central banks and corporations including General Electric and Morgan Stanley reported profits that topped expectations.
Meanwhile Fed Chair, Janet Yellen believes that the widening inequality paused during recession, has resumed in recovery. In economic data, new-home construction climbed 6.3 percent in August, signaling improvement in the US residential real-estate market.
Also the preliminary read for consumer sentiment in October came in at 86.4 versus 84.0 estimate. Asian markets gained in a broad rally on Monday. The Nikkei rebounded from four-month low while Kospi recovered from eight-month low.
Nymex crude futures bounce back after a three-week fall that pulled prices to their lowest since 2012 amid abundant supply and slack demand. Brent crude too rises to 86 dollars per barrel.