The News International Team
The market recouped previous day’s losses on Tuesday with the Nifty closing above the 8000-mark supported by banking & financials, healthcare and capital goods stocks.
The 30-share BSE Sensex climbed 127.92 points to 26880.82 and the 50-share NSE Nifty rising 35.90 points to 8027.60.
Though there is volatility in the equity market ahead of October series expiry (on October 30) and FOMC meeting (October 28-29), the market will remain strong in medium term, feel experts.
Gautam Shah of JM Financial said Indian equities have been resilient as there has not been even a 10 percent correction in the last 14 months.
“This market has seen only time correction and no real price correction. The market set-up continues to be very constructive and the bull trend is definitely intact. So, these dips are healthy for the Nifty to continue its upmove,” he added.
Continuing his positive tone, he said that 8,050 level is short-term resistance for the Nifty and it is likely to hit new record high once this level is breached. Further, he sees the benchmark at 8,700-8,800 by this year-end .
It was a strong day for global markets too. Asian markets like Hang Seng, Shanghai and Taiwan Weighted gained 1.6-2 percent while Germany’s DAX rose over a percent. Goldman Sachs raised its target on S&P 500 to 2050 by December and 2150 by the end of 2015.
Back home, the World Bank sees India’s economic growth quicken to 5.6 percent in FY15 (from 4.7 percent in FY14) driven by accelerated reforms and expeditious clearances of large projects, adding growth will accelerate further to 6.4 percent in FY16.
In a mark of confidence on the Indian e-commerce sector Japanese telecom and internet giant Softbank group announced investment of USD 627 million in Indian online retailer Snapdeal. Softbank chairman Masayoshi Son said they will invest USD 10 billion in India over the next 10 years while Kunal Bahl, co-founder & CEO of Snapdeal said Softbank will be a significant shareholder, but the Snapdeal management will continue to run the business.
Sun Pharma topped the buying list, up more than 4 percent following strong earnings from Ranbaxy Labs that is going to become the Sun’s subsidiary soon. Revenues rose by 16 percent due to exclusivity sales of Valsartan (generic of Diovan – to treat high blood pressure) in the US while it reported a consolidated profit of Rs 478 crore during the quarter as against loss of Rs 454 crore in the year-ago period. Ranbaxy gained 6 percent.
Cipla surged 3 percent while Lupin dropped 2.6 percent as the drug maker disappointed on topline and operational front in the second quarter, though profit growth was 55 percent – higher than analysts’ expectations.
Dr Reddy’s Labs declined 0.8 percent ahead of second quarter earnings on Wednesday. A CNBC-TV18 poll expects drop of 22.2 percent (year-on-year) in profit at Rs 537 crore.
Top private sector lender ICICI Bank gained 1.8 percent after brokerage house Bank of America Merrill Lynch has set a target price of Rs 2000 per share on ICICI but hopes for the stock to double in 3-4 years if multiples sustain.
State Bank of India, HDFC, Tata Motors, Mahindra & Mahindra, Gail India, Tata Power, BHEL and NTPC were other prominent gainers, up 1-2.5 percent.
However, shares of Reliance Industries, Hero Motocorp, ONGC, Bharti Airtel and Hindustan Unilever (post earnings) fell 0.8-1.7 percent.
In the midcap space, NCC, Manappuram Finance, HMT, Kalyani Steel, Marksans Pharma, Escorts, HCC, HFCL, HCL Infosystems, Suzlon Energy, JM Financial and Gati rallied 4-12 percent.
However, Astral Poly Technik, Tata Metaliks, Arvind, Rico Auto, Sintex Industries, Reliance Communications, Just Dial and Tilaknagar Industrries declined 1-6 percent.
About 1508 shares advanced while 1374 shares declined on the Bombay Stock Exchange.