The News International Team
Equity benchmarks started of the Diwali week with more than a percent gain on Monday, rejoicing after the BJP election win, diesel deregulation and gas price hike announced over the weekend.
The 30-share BSE Sensex climbed 321.32 points or 1.23 percent to close at 26429.85 and the 50-share NSE Nifty jumped 99.70 points or 1.28 percent to 7879.40. The broader markets rallied too with the BSE Midcap gaining over a percent.
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.
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.
He expects the Modi government to surpass most expectations in next five years and sees accelerated policy actions over the next six months.
Narendra Modi government on Saturday raised natural gas price to 5.61 per mmbtu from USD 4.2 per mmbtu earlier and deregulated diesel price. The government also reduced diesel price by Rs 3.37 per litre on fall in crude oil prices.
After unveiling these much awaited reforms for the oil and gas sector, Oil Minister Dharmendra Pradhan said the government may see savings of Rs 10,000 crore from direct benefit plan by FY16 and will focus on ONGC divestment in FY15.
The cabinet is also likely to discuss a refurbished policy for the coal sector today. De-nationalisation of coal and pooling of coal and gas prices may also be on the cards.
On political front, BJP and its allies won 123 out of total 288 seats in Maharashtra and 47 out of 90 seats in Haryana. Reports suggest that the BJP is likely to declare the chief ministers for Haryana and Maharashtra today. While Devendra Fadnavis is the clear front runner for Maharashtra, Captain Abhimanyu Singh may be a choice for the Haryana chief minister post.
Global markets were mixed. Asian markets closed on a positive note with the Nikkei rising 4 percent on strong US economic data while European markets were down around 1 percent (at 16 hours IST).
Back home, all sectoral indices barring IT ended higher today. BSE Auto, Capital Goods, Oil & Gas, Bank, Metal, Power and Healthcare indices gained 1-2 percent.
ONGC rallied 5.4 percent on gas price hike while oil marketing companies HPCL, BPCL and IOC surged 4-7 percent on diesel deregulation.
UltraTech Cement climbed 5.5 percent following higher-than-expected earnings in July-September quarter. Net profit shot up 55 percent year-on-year to Rs 410 crore while revenue grew by 20 percent to Rs 5,429 crore driven by higher cement sales volumes. CLSA maintains a buy on the stock with a revised target price of Rs 3150.
Axis Bank surged 4 percent post second quarter earnings met street expectations. Bank of America Merrill Lynch raised EPS by around 1-2 percent for FY15/16 factoring in stronger loan growth and higher margins and raises target price on the stock to Rs 500 (from Rs 450).
Shares of Tata Motors, ICICI Bank, Larsen and Toubro, HDFC, SBI, Hindalco Industries, Maruti Suzuki, Hero Motocorp, Sesa Sterlite and Coal India gained 2-5 percent.
However, Infosys, ITC, Wipro and TCS underperformed, falling 0.5-1.7 percent.
Jindal Steel & Power plunged over 7 percent as sources said CBI has registered a fresh case of alleged cheating and corruption against the company, in connection with its probe into coal blocks allocation probe.
About 1639 shares advanced while 1209 shares declined on the Bombay Stock Exchange.