The News International Team
It was another consolidation day for equity benchmarks on Wednesday but the broader markets outperformed frontline indices throughout the session.
The 30-share BSE Sensex fell 1.30 points to 28442.71 while the 50-share NSE Nifty rose 12.95 points to close at 8537.65. The BSE Smallcap Index gained 1.6 percent.
The CNX Midcap Index ended at record closing high today, up 1.5 percent as Eicher Motors (up 7 percent) and Bajaj FinServ (up 8 percent) were top contributors to midcap gain.
Experts feel the market may remain in a consolidation mode due to lack of triggers in near term. November inflation and October industrial output data will be the next triggers.
Rakesh Arora, Macquarie says despite the outperformance relative to global markets, the Indian market is still below previous valuation peaks.
He believes the market can re-rate further to 16-17x if economic recovery is stronger-than-expected. “Our 12-month Nifty target is 9,940 based on 15x FY17e EPS,” he adds.
Meanwhile, the Bombay Stock Exchange closed with a market capitalisation of Rs 100 trillion for the first time ever.
State-run oil explorer ONGC topped the buying list in the Sensex, up 3 percent after agencies report indicated that the government is considering reworking company’s subsidy formula. According to the report, reworking subsidy formula could improve ONGC profitability.
Jindal Steel was the biggest gainer in the Nifty, up 8 percent as coal prices declined 50 percent, which is positive for steel companies struggling for coal.
BHEL was up 2.5 percent as the power equipment maker has successfully developed, manufactured and commissioned India’s first phase shifting transformer Kothagudem Thermal Power Station in Telegana.
Utility vehicle maker Mahindra and Mahindra climbed 1.6 percent as CLSA maintains buy on the stock with a target price of Rs 1550. According to the brokerage, M&M’s stock performance is now completely hinged on the market response to upcoming new products in FY16.
India’s largest private sector lender ICICI Bank gained 1.3 percent ahead of ex-split date (Thursday). The current face value of the stock will be reduced from Rs 10 to Rs 2, which means one share will be dividend into five shares.
Among others, shares of Axis Bank, Hindustan Unilever, NTPC, Maruti Suzuki and Gail India advanced 1-1.7 percent whereas HDFC, HDFC Bank, Dr Reddy’s Labs and Bharti Airtel declined 1-2.4 percent.
Hindalco Industries was down 1.5 percent as sources told CNBC-TV18 that the aluminium major may carve out plan to restructure Rs 63,000 crore debt. The debt restructuring could be undertaken in 3-4 phases, say sources.
In the broader space, Eicher Motors closed at record high of Rs 15,375, up 7.14 percent and TVS Motor gained 6.4 percent after Goldman Sachs resumed coverage on both the stocks with a buy. On TVS, Goldman has a 12-month target price of Rs 345 and on Eicher a 12-month target of Rs 19235.
Havells India (up 3.5 percent), Bajaj Electricals (up 5.5 percent) and Surya Roshni (up 16 percent) saw huge buying interest. CNBC Awaaz reports suggested that all government offices and municipal corporations will have LED lights.
Insurance companies such as Reliance Capital, Max India and Bajaj Finserv climbed 4-8 percent on news of FDI in insurance making headway. Reports indicated that the Congress has back key reforms measures and the draft report is expected in first 10 days of December after which the panel will approve. It will be tabled in the house thereafter.
Construction stocks like NCC, HCC, IVRCL, NBCC, Ashok Buildcon, Gammon India and Gammon Infrastructure rallied 5-7 percent as the government eased FDI rules for construction sector and DIPP released press note on FDI in construction development.
Telecom operator MTNL surged nearly 9 percent as Telecom Minister Ravi Shankar Prasad says there is no proposal for disinvestment of MTNL and BSNL. In fact, the government is in process of revitalising both companies, says Prasad, adding revival measures include merger of MTNL and BSNL and four groups formed to study BSNL and MTNL merger.
Among others, Essar oil, Sun TV Network, Texmaco Rail, Kalindee Rail, Siti Cable, Firstsource Solutions, Tourism Finance, Suzlon Energy and Engineers India shot up 6-20 percent.
However, Pratibha Industries was down 5.5 percent as Crisil downgraded the company’s ratings to BB+ negative from BBB negative to reflect the expectation of continuing pressure on the group’s financial risk profile. The company told CNBC-TV18 that its net debt stood at Rs 1,700 crore and it expects debt to be down by Rs 200-300 crore by end of 2015 via monetisation of non-core assets.
Shares of Steel Authority of India (SAIL) fell nearly 5 percent as sources told CNBC-TV18 that the government will conduct offer for sale (OFS) on Friday. The Government of India holds 80 percent stake in the steel maker, as of September 2014.
Advancing shares outnumbered declining ones by a ratio of 1926 to 1088 on the Bombay Stock Exchange.