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Sensex, Nifty choppy; infra auto stocks surge, IT weak

13:00

The News International Team

1:55 pm Q4 earnings preview:  A double whammy of seasonal weakness and cross-currency headwinds may have hurt dollar revenues of frontline IT services firms during the December quarter, according to a Deutsche Bank report.

“We expect Infosys to be affected the least and TCS the most by the adverse currency movements. Tech Mahindra continues to gain share and we expect it to deliver USD revenue growth of 3.8 percent quarter on quarter, significantly higher than peers at 0.4-1.2 percent Q-o-Q,” Deutsche said, adding that Tech Mahindra and TCS continue to remain its top picks.

According to Deutsche, the cross-currency headwinds faced by tech companies in December were the most severe quarterly movements of the past four years.

1:30 pm Buzzing: Shares of Cadila Health jumped 5 percent intraday after Credit Suisse has maintained an outperform rating on the stock. The brokerage has also increased its target price to Rs 1900 per share indicating a 17 percent potential upside.

Cadila is Credit Suisse’s preferred picks due to strong US pipeline and its next key catalyst is Prevacid approval. 

It believes that Cadila’s price hike of HydroxyChloroquine (antimalarial drug) after IPCA/Ranbaxy exit will add 15 percent to FY16 EPS. The benefit of higher prices and market share is likely to reflect in December 14 quarter results, it adds. It also expects Cadila to increase market share from 30  percent to 50 percent. At 50 percent volume share, it is hopefult that Hydroxychloro will add Rs10 EPS to FY16 or 15 percent.

Don’t miss: Maruti at new high; CLSA retains buy on launch & exports growth

It has been very volatile trading day with the market showing some wild swings. The Sensex is down 151.31 points at 27876.35 and the Nifty is down 6.55 points at 8388.90. About 1505 shares have advanced, 1277 shares declined, and 595 shares are unchanged.

Maruti, ONGC, Tata Steel, L&T and Hero are major gainers while Bharti, Dr Reddy’s, TCS, BHEL and HDFC fall.

The broader Nifty rose to its highest in nearly a month, gaining for a seventh consecutive session as stocks focused on the domestic market rose on hopes of fresh foreign allocations at the start of the year.

Foreign investors bought Indian shares worth USD 45.3 million on Thursday and Friday, adding to the USD 16.11 billion they infused in 2014, as per regulatory data.

Investors expect Prime Minister Narendra Modi’s government to continue with the reforms process while fresh buying is expected ahead of the federal budget and December-quarter results.

The quarterly earnings season kick-starts with Infosys’ results on January 9.

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