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Sensex up 366 pts on short covering, rupee gain; banks lead

16:24

The News International Team

After losing nearly 1000 points (on the Sensex) in previous three trading sessions, the market staged smart recovery on Thursday driven by short covering, rupee and positive global cues. Banking & financials and FMCG stocks took the centrestage.

The 30-share BSE Sensex climbed 365.89 points or 1.36 percent to 27274.71 and the 50-share NSE Nifty jumped 132.50 points or 1.64 percent to 8234.60. The broader markets outperformed frontline indices with the BSE Midcap and Smallcap indices rising 1.8 percent each.

Though there has been big volatility in market due to global factors, India’s fundamentals are intact which may push markets towards new highs soon, feel experts.

“We expect a reasonable 20 percent return from the Indian equities in 2015. Domestic institutions will be key drivers of Indian equities this year. New government has been working ever since it came to power,” says Adrian Mowat of JPMorgan.

According to him, oil price decline is a boon for Asian consumers. “The current correction in the global markets must be used as a good buying opportunity,” says Mowat.

Asian equity markets with the exception of Shanghai (down 2.4 percent) gained 0.7-1.7 percent today. European markets rallied more than a percent (at 16 hours IST. However, Brent crude erased all its gains, falling 0.31 percent to USD 50.99 a barrel while US crude rose 0.23 percent to USD 48.76 a barrel.

Back home, the Indian rupee gained past 63 a dollar mark, up 50 paise to 62.67 a dollar as exporters and foreign banks stepped up dollar sales.

All sectoral indices closed in green with the FMCG and Bankex leading the gains, up 2 percent each. Auto, Capital Goods, Healthcare, IT, Metals and Power were up 1-1.6 percent.

Infosys gained 0.7 percent ahead of its third quarter earnings on Friday. According to a CNBC-TV18 poll, India’s second largest software services exporter is set to kick off earnings with a 1.9 percent growth in profit at Rs 3,157 crore and 1 percent growth in dollar revenues at USD 2,222 million during October-December quarter.

Coal India was up 0.8 percent after trade unions called off their strike late last evening. Coal minister, Piyush Goyal says workers’ issues were addressed. Morgan Stanley remained equalweight on the stock.

Asian Paints topped the Nifty charts, up 6 percent after Macquarie initiated coverage on the stock with outperform rating and set a target price of Rs 923. The brokerage house also initiated coverage on Berger Paints with outperform rating and target price of Rs 255; the stock gained 10 percent.

Kotak Mahindra Bank and ING Vysya Bank spiked 5.4 percent each after shareholders in an extraordinary general meetings approved merger of both banks.

BPCL climbed 5 percent after CLSA upgraded the stock to buy with a target price of 800. The brokerage preferred BPCL over IOC and HPCL. Tata Motors topped the buying list on Sensex, up 3.7 percent after Jaguar Land Rover’s UK sales grew 25 percent year-on-year to 5,008 units in December.

Among others, shares of DLF, JSPL and Cairn India surged 5-6 percent. ITC, ICICI Bank, HDFC Bank and HDFC were top contributors to Sensex gain, up 2-2.5 percent. However, Reliance Industries was the only loser among Sensex 30 stocks, down 1.5 percent.

In the broader space, Pipavav Defence, Parsvnath Developers, Walchandnagar, Berger Paints, Intellect Design, Talwalkars Fitness, Voltas, IVRCL, TVS Motor, Rolta India, IRB Infra, Union Bank of India, Adani Ports and Dhanlaxmi Bank surged 4-18 percent.

Marico Kaya Enterprises rallied 20% after Motilal Oswal recommended buy on the stock with a target price of Rs 1250. The brokerage expects EBITDA margins of the company to improve from 4.6 percent in FY14 to 12.4 percent by FY17E.

Gravita India was up 13.6 percent as CARE Ratings upgraded long-term bank loan rating of the company to A- from BBB+ and short-term bank loan rating to A2+ from A2.

SPML Infra surged 5.7 percent as the company received worth Rs 334 orders in Karnataka and approved qualified institutional placement (QIP).

The market breadth was strong throughout the session. About 2033 shares advanced while 852 shares declined on the Bombay Stock Exchange.

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