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Sensex snaps 3-day fall, midcaps outperform; banks support

16:15

The News International Team

Equity benchmarks snapped three-day losing streak to close marginally higher amid consolidation on Wednesday despite mixed global cues. The broader markets outperformed benchmarks.

The 30-share BSE Sensex rose 34.09 points to 27831.10 and the 50-share NSE Nifty closed above 8350 level, up 14.95 points at 8355.65 while the BSE Midcap and Smallcap indices gained 1 percent each.

The market may remain in consolidation mode due to lack of triggers in near term, but the undertone of the market is still very buoyant, feel experts.

Bharat Iyer, JPMorgan says equity markets are in consolidation mode, adding trading volumes and values, delivery volumes and outstanding positions in the derivatives segment picked up a tad over the last month.

“Investor sentiment remains positive, as reflected in net buying by FIIs and local MFs. But insiders were sellers and the breadth was negative too,” he adds.

Also read: Softening commodity prices: Which stocks to bet on now?

On the global front, Asian markets closed mixed with the Shanghai rising 3 percent after falling initially while Nikkei lost more than 2 percent. The economic data continued to be weak as China November consumer inflation eased to 5-year low of 1.4 percent stoking expectations that Beijing may move more aggressively to head off the risk of deflation in a slowing economy.

Jim Walker of Asianomics says the Chinese economy is slowing down rapidly and is growing at 5-6 percent, which is nowhere close to 7 percent forecasted earlier. He expects the growth to slowdown to 3-4 percent in 2015.

European markets like France’s CAC, Germany’s DAX and Britain’s FTSE were trading 0.2-0.7 percent higher (at 16 hours IST).

On the home turf, State Bank of India was the top gainer on the Sensex, up 3.5 percent followed by ICICI Bank and HDFC Bank with over half a percent gain. The PSU Bank index rallied 3 percent.

State-run oil and gas explorer ONGC was up 2.4 percent. Media report suggested that India and Russia may sign energy pact during Russian President Vladimir Putin’s India visit. In this pact, Rosneft is likely to offer 10 percent stake in Vankor field and 49 percent stake in Yurubcheno-Tokhomskoye to ONGC, says the report.

Tata Power climbed 1.9 percent. The company said it will acquire Ideal Energy Projects (owned by DP Mhaiskar, the founder of IRB Infrastructure Developers) in Maharashtra. Ideal Energy owns 540 MW thermal power project in Nagpur.

Drug maker Cipla gained 1.3 percent after its subsidiary Meditab decided to sell entire 48.22 percent equity stake in Chinese company Jiangsu Cdymax Pharmaceuticals Company.

Tata Motors, the commercial vehicle maker and owner of luxury car maker Jaguar Land Rover, rebounded in afternoon trade to close with 1.55 percent gain. The stock fell more than 2 percent in early trade on fears that China growth slowdown may impact JLR sales. Meanwhile, Citi maintains buy on the stock as it believes with strong product pipeline, JLR volume growth should remain strong.

Among others, Dr Reddy’s Labs, Sesa Sterlite and Hero Motocorp gained more than a percent while L&T, HUL, Bajaj Auto and Gail India declined 1-2 percent.

Power equipment maker BHEL was down 2.5 percent as JP Morgan maintained underweight rating on the stock with a target of Rs 175 apiece.

In the broader space, insurance companies like Reliance Capital and Max India rallied 4-5 percent. The select panel on insurance recommended a composite cap of 49 percent on all forms of FDI and FPI, saying term ‘control’ must be defined in the Insurance Act in the report tabled in the Rajya Sabha today.

The rally in Reliance Capital was also supported by a media report suggested that the Anil Dhirubhai Ambani Group company may sell entire stake in online travel company for Rs 500 crore.

Power Finance Corporation and Rural Electrification Corporation surged 5-6 percent after finance ministry sources told CNBC-TV18 that both companies’ divestment is unlikely in FY15. CCEA had approved 5 percent stake sale in both companies each in November 2014.

NBCC climbed over 2 percent. Nomura reiterates buy rating post their meeting with the management with a target price of Rs 1049. SKS Microfinance shot up nearly 11 percent after UBS initiated coverage with buy rating and a price target of Rs 500 per share as it expects 32 percent CAGR in AUMs over FY15-17.

Opto Circuits remained on buyers’ radar, up 3 percent as a media report suggested that DIPP moved a cabinet note to allow 100 percent FDI in medical devices.

Sugar stocks like Bajaj Hindusthan, Shree Renuka Sugars, Balrampur Chini, Triveni Engineering, Dhampur Sugar and Sakthi Sugars saw huge buying interest today, rising 3-11 percent.

In the smallcap space, Bartronics India, JMT Auto and OCL India surged 20 percent each while Nilkamal, Indo Count Industries, Hindusthan Dorr-Oliver, Archies, Clutch Auto, NCC and Redington gained 4-16 percent.

About 1681 shares advanced while 1255 shares declined on the Bombay Stock Exchange.

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