The News International Team
10:59am Market Update
The Sensex rose 202.53 points to 28324.42 and the Nifty climbed 54.85 points to 8568.65. About 1624 shares have advanced, 722 shares declined, and 257 shares are unchanged on the Bombay Stock Exchange.
10:55am Air India in News
State-owned carrier Air India is to cuts its costs by Rs 1,400 crore (USD 227 million), or about 6 percent of its total outlays, in the next financial year after the government asked the loss-making airline to improve its finances.
Air India, which controls close to a fifth of India’s domestic air travel market, has been losing money for years and has long been criticised for its high costs. In 2012, the government handed the company a USD 5.8 billion bailout package.
The airline said in a statement late on Sunday that it would identify “surplus staff”, freeze contractual hiring and discontinue flights which are not meeting fuel cost targets, to reduce its variable spending of 140 billion rupees by a tenth.
Restrictions on staff travel and hospitality have also been introduced, Air India said, reports Reuters.
10:30am FII View
Prabhat Awasthi, Nomura says the December 2015 Sensex target of 33,500 implies 20 percent potential upside.
“Our bullish stance on the Indian market for this year is based on our high-conviction view that the improvement in India’s macro environment over the past year is durable and will improve further. The lagged effect of the much-needed complete overhaul of the political economy is a significant tailwind. The extent to which this is not yet priced in will provide upside to multiples, thus adding to market returns over and above earnings growth, in our view,” he adds.
10:00am Market Check
Equity benchmarks maintained early gains with the Sensex rising 188.91 points to 28310.80 and the Nifty climbing 50.75 points to 8564.55.
The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 1 percent each. Nearly three shares advanced for every share declining on the Bombay Stock Exchange.
Wipro surged 7 percent as the company reported stronger-than-expected results with a constant currency growth of 3.7 percent which is the highest in the last 12 quarters and better than peers. JP Morgan says attractive valuations (14.6x FY16 & 12.9x FY17 EPS) could still give more than 15 percent potential stock return over CY15.
HCL Technologies gained 2.5 percent ahead of board meet on January 28-30 to consider bonus issue. GAIL India surged 3 percent after the management told CNBC-TV18 that the company won’t have to pay subsidies in the second half of current financial year 2014-15.
However, HUL declined 1.5 percent, retreating from its life-time highs ahead of its earnings today. A CNBC-TV18 poll expects around 10 percent revenue growth of Rs 7,963 crore, operating margins of 17.8 percent and 5-6 percent volume growth YoY in Q3.