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Sensex, Nifty climb over 1%; OMCs rally, IT stocks lose

10:00

The News International Team

10:45am Idea second quarter earnings today

Telecom operator Idea Cellular is expected to report a 9.4 percent decline (Q-o-Q) in second quarter profit at Rs 660 crore today as July-September quarter is a seasonally weak quarter for the sector, according to the average of estimates of analysts polled by CNBC-TV18. Profit in the previous quarter was Rs 728.2 crore.

Revenue may fall 1.9 percent to Rs 7,417 crore in the quarter ended September 2014 compared to Rs 7,561 crore in previous quarter.

Operating profit is likely to decline 3.9 percent sequentially to Rs 2,413 crore and margin may slip 67 basis points to 32.53 percent in the quarter gone by (but may rise 130 basis points on year-on-year basis).

10:30am Interview

The government on Saturday fixed new gas price at USD 5.61 per million british thermal unit (MMBTU), increased from USD 4.2 per mmbtu earlier. However, it reduced diesel price by Rs 3.37 per litre following sharp fall in crude oil prices in international markets.. So how are the reforms going to impact the oil marketing companies?

In an interview to CNBC-TV18, B Ashok, Chairman, IOC , said the gas price hike will benefit industry and economy as a whole and expects a higher competition going ahead.

Ashok expects subsidy burden to be around Rs 85,000 crore with fall in crude. “When you compare it with last year, the overall subsidy was about or under recoveries were about Rs 1,40,000 crore out of which the diesel component was nearly Rs 63000 crore. So there has been a significant impact in terms of diesel under recoveries and for the rest of the year since the decontrol has happened there is not likely to be any under recovery on diesel,” he said.

10:15am Market Expert

Madhu Kela of Reliance Capital is bullish on Indian equities from a three-year horizon and expects the asset class to outperform others like real estate, fixed income and gold in that time frame. In a Diwali special interview Samavat 2071, to CNBC-TV18, he says many investors are feeling left out in this current rally and are waiting for dips to participate. 

Continuing his positive tone, he says that earnings growth over the next three years will take many market participants by surprise. He foresees earnings growth crossing 20 percent from FY16 onwards.

Speaking about the macros, Kela says that India is coming out of a dismal phase of capex and investment cycle. Also, there are early indications of improvements on stalled projects, but the real turnaround in India’s fundamentals will happen significantly over the next six months. He expects the Modi government to surpass most expectations in next five years and sees accelerated policy actions over the next six months.

Despite this, he feels that the current market rally is not as compelling as the one seen 2003. “The market is not as cheap as it was in 2003. The market in 2003 was literally undiscovered with company valuations on the lower side,” he adds.

10:00am Market Check

Equity benchmarks maintained strong upside of over a percent after the government kicked off its reforms agenda with announcement of gas price hike and diesel deregulation. Oil and gas, banking and financials, healthcare, capital goods and auto stocks continued to support the market.

The 30-share BSE Sensex rose 320.77 points to 26429.30 and the 50-share NSE Nifty jumped 101.80 points to 7881.50. The broader markets gained too with the BSE Midcap and Smallcap indices rising 1.3 percent and 1.4 percent, respectively.

About three shares advanced for every share declining on the Bombay Stock Exchange.

ONGC kept its top position in the buying list, up over 5 percent after the government raised natural gas price to USD 5.61 per mmbtu from USD 4.2 per mmbtu while oil marketing companies like IOC, HPCL and BPCL gained 4-6 percent after the government deregulated diesel price.

Shares of HDFC, ICICI Bank, Tata Motors, L&T, SBI, Axis Bank, Cipla, Gail India and Hindalco Industries rallied 2-3 percent.

However, Infosys, TCS, Hero Motocorp and Wipro declined 0.5-1 percent.

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