The News International Team
The 30-share BSE Sensex snapped three-day losing streak on Thursday, largely led by banking & financials stocks and index heavyweight ITC. The index gained more than 350 points in early trade to touch a life high of 28808.78 (8,626.95 on the Nifty) but gradually in next half an hour wiped out almost all gains. In last hour of trade, again the index gained strength following upside in global markets on hopes of fiscal stimulus from the European Central Bank.
The Sensex rose 120.11 points to close at 28562.82 and the Nifty climbed 26.75 points to 8564.40 while the BSE Midcap and Smallcap indices gained 0.3 percent each.
Experts feel the market may continue to hit new record high (at least till the second Union Budget of Narendra Modi-led government) but if the correction happens, then that may be maximum 4-5 percent.
Bullish Rakesh Arora, Head of Research – India at Macquarie Capital Securities has a new Nifty target of 9,960 for the next 12 months. He expects earnings to grow 19-20 percent and adds that this fresh Nifty target is driven by 15 times earnings estimate for FY17.
Given the ongoing slide in global oil prices, he foresees more upside to the market if this fall continues further.
On the global front, China’s Shanghai was the top gainer, up 4.3 percent followed by Hang Seng with 1.7 percent upside on the back of strong US data. In Europe, France’s CAC and Germany’s DAX gained 0.5 percent ahead ahead of the European Cental Bank meet later today.
Back home, cigarette major ITC was stock of the day today, up 5.44 percent after sources told CNBC-TV18 that the government is unlikely to ban sale of loose cigarettes in near term as the proposal will hurt tobacco farmers. The health and agriculture ministries will now conduct a study on the same, say sources. Godfrey Phillips and VST Industries gained of 5 percent and 2.56 percent, respectively.
Private sector lender ICICI Bank gained 0.9 percent after sub division of shares from face value of Rs 10 to Rs 2. Rivals HDFC Bank and State Bank of India too rose 0.9 percent each while housing finance company HDFC was up 0.66 percent.
Among others, Cipla and Sesa Sterlite climbed more than 2.5 percent whereas BHEL, Hindalco Industries, Reliance Industries, Larsen & Toubro, Bharti Airtel and Tata Power were down 0.7-2 percent.
Infosys fell nearly 1 percent. CEO, Vishal Sikka outlined strategy for the first time after joining the company, saying ‘renew’ and ‘new’ will be the strategic focus for the IT major. He is also looking at acquisitions in under-penetrated geographies and verticals.
Utility vehicle maker Mahindra and Mahindra was down 1.5 percent as reports indicated that the company is close to another global acquisition. Company among two Asian carmakers is in talks to acquire a majority stake in National Electric Vehicle Sweden (NEVS), say reports.
In the broader space, ABB climbed 13 percent as ABB Global CEO told CNBC-TV18 that they have no plans to delist subsidiary ABB India. He says that they have plan to double exports from India in next 3-5 years.
Sadbhav Engineering gained nearly 1 percent after the company’s subsidiary Sadbhav Infra filed a DRHP with Sebi to undertake IPO. Sadbhav Infra will issue 1.62 crore shares worth Rs 600 crore in an IPO.
Page Industries was up 2 percent after brokerage Barclays initiated coverage of the stock with an overweight rating. The brokerage has 12-month P/E-based price target of Rs 10,954 (13 percent potential upside) on the stock as it expects Page’s robust earnings trajectory to be sustained.
National Buildings Construction Corporation (NBCC) surged 5.5 percent as it signed a memorandum of understanding (MoU) with Air India for development of land parcels of Air India at various locations on joint venture basis.
Shipping stocks like Bharati Shipyard, ABG Shipyard, Varun Shipping, SCI, Shreyas Shipping and Pipavav Defence rallied 3-12 percent after the government today asked Reserve Bank of India to relax rules to revive the shipbuilding industry. The government also asked RBI and finance ministry to sanction special dispensation for 5 years.
However, shares of Jubilant Foodworks fell nearly 3 percent as Barclays initiated coverage on the stock with an underweight rating, citing risk reward mismatch. The brokerage has a target price of Rs 1,250 on the stock, implying potential downside of 15 percent as it believes the same-store-sales growth recovery of the company will be 8-10 quarters away.
Archies fell 9 percent after promoter Varun Moolchandani offloaded 0.8 percent stake in the company through a block deal on the National Stock Exchange in previous session.
About 1502 shares advanced while 1450 shares declined on the Bombay Stock Exchange.