The News International Team
11:45 am FII view: Investors should brace for lower returns this year after a heady 2014, as the high base effect will temper gains, says Gautam Chhaochharia, Head of Research, UBS Securities. He expects a few earnings downgrades near term, but sees strong earnings growth as the key trigger during the latter part of the year. He estimates an average earnings growth of 15 percent in FY16. According to Chhaochharia, economic growth could be gradual even as there are likely to be positive surprises on interest rates and inflation.
He says economic growth could even be lower than consensus estimates. He is positive on the banking sector in general, with a positive bias for state-owned banks. He sees banks as the best plays on coal and power sector reforms. Chhaochharia is overweight on oil and gas as he sees the sector to be a major beneficiary of reforms. His top picks in this space includes ONGC.
11:30 am Buzzing: Shares of ITC slipped 4 percent intraday as the government may ban sale of loose cigarettes. The government on Tuesday moved to amend the anti-smoking law and proposed radical changes, including a ban on the sale of loose cigarettes and raising the minimum age of a person buying tobacco products to 21 years from the existing 18.
It has also proposed raising of fine to Rs 1,000 from Rs 200 on smoking in public places as well as recommending removal of designated smoking zones in hotels and restaurants.
Health minister JP Nadda had told Rajya Sabha during the winter session that his ministry had accepted the recommendations of the committee formed to review the existing Act, and a draft note for the cabinet was circulated for inter-ministerial consultation.
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The market is still flat waiting for some positive trigger by December quarter corporate earnings. The Sensex is down 45.03 points at 27380.70 and the Nifty slips 8.35 points at 8291.05. About 1251 shares have advanced, 1052 shares declined, and 327 shares are unchanged.
Cement stocks continue to gain today. Sanjay Ladiwala, in an interview to CNBC-TV18, said cement price increases are seen with logistics rather than demand being the reason for the price hike. Current capacity utilisation stands at 68 percent for Indian cement industry.
HUL, BHEL, Bajaj Auto, and HDFC twins are top gainers in the Sensex. Among the losers are Sesa Sterlite, Hindalco, ITC, Tata Steel and GAIL.
Globally, Asian markets are mixed as oil continues to trade at multi year lows. Gold slips from 12-week highs.