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Choppy Sensex falls for 3rd day; ICICI drags, HUL RIL up

16:00

The News International Team

It was a consolidation day for the equity benchmarks as well as broader markets on Wednesday after a 3 percent cut seen in previous session.

However, market experts were not too worried about the correction. Ridham Desai of Morgan Stanley expects more volatility ahead but expects earnings to pick up in the next two quarters. Arvind Sanger of Geosphere says though he was cautious, he will buy into India on dips.

The 30-share BSE Sensex fell 78.64 points to 26908.82 while the 50-share NSE Nifty held 8100 level amid pressure, down 25.25 points to 8102.10. The broader markets closed flat.

Globally, the big news of the day was that the Brent crude oil prices fell below USD 50 a barrel for the first time since May 2009 on supply glut worries. It was down 0.86 percent to USD 47.60 a barrel and US crude declined 0.69 percent to USD 47.60 a barrel. Seth Kleinman of Citi says crude will find a bottom at these levels.

Equity markets rebounded on buying interest led by short covering. In Asia, major markets like Shanghai, Hang Seng climbed over 0.6 percent at close while European markets (at 16 hours IST) were up over 0.6 percent.

Back home, the rupee gained strength, rising 24 aise to 63.33a dollar on fresh selling of dollar by banks on hopes of resumption of capital inflows (at 16 hours IST.

Heavyweights like private sector lender ICICI Bank, cigarette major ITC, commercial vehicle maker Tata Motors extended losses today, falling 1-2 percent. Shares of Hindalco Industries, BHEL, Coal India, Tata Steel and Hero were down 1-3 percent.

Lower oil prices continued to impact stocks like GAIL and Cairn, down more than 2 percent. Media report suggested that gas transmission company GAIL postponed LNG tender date as it found no takers for the same.

However, HUL continued its gains, 3.4 percent today and 6 percent year-to-date. In fact it was the top gainer as brokerages upgrades. In previous session, Deutsche Bank upgraded the stock to buy with a target price of Rs 900 and today Credit Suisse and JP Morgan followed suit. Credit Suisse upgraded the stock to outperform from neutral with an increased target price at Rs 915 from Rs 800 earlier and also upgraded earnings by 4 percent to build in lower input costs. JP Morgan upgraded the stock to neutral with a December 2015 target price of Rs 790.

Shares of Reliance Industries, Maruti Suzuki, Mahindra & Mahindra and NTPC gained 1-2.6 percent.

ONGC was up 1.7 percent. UBS says ONGC is relatively better positioned than global emerging market upstream oil state owned entities. Valuations are at trough levels on enterprise value/EBITDA and price to book value, according to the brokerage. UBS has a buy rating on the stock. “It is among our top picks with a target price of Rs 480,” it adds.

Kotak Mahindra Bank and ING Vysya Bank climbed around a 2 percent ahead of extraordinary general meeting today for approving the USD 2.5 billion all stock deal between the two.

In the broader space, Praj Industries jumped 3 percent on getting order for ethanol plant in Uganda from Kakira Sugars. Financial Technologies rose 1.4 percent as the company sought shareholders’ nod for sale of Bourse Africa.

Opto Circuits was up 1.4 percent as media report suggested that a 100 percent FDI in medical devices will take effect from January 21.

Heineken may buy stake in United Breweries from its lenders, reports CNBC-TV18 quoting sources. Heineken holds 39.01 percent stake and UB Group 35.81 percent stake in United Breweries. About 53.88 percent of UB Group shares are pledged currently.

About 1363 shares advanced while 1500 shares declined on the Bombay Stock Exchange.

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