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Sensex up 292 pts, Nifty ends above 8900; banks, ITC lead

16:23

The News International Team

Bulls remained in power for the eighth consecutive session on Tuesday as the frontline indices ended at fresh record closing high. It was looked like a consolidation day in morning but in last hour of trade, the market gained huge strength supported mainly by banks.

The 30-share BSE Sensex hit an intraday high of 29618.59, before closing up 292.20 points or 1 percent at 29571.04. The 50-share NSE Nifty ended above the 8900-mark for the first time today, up 74.90 points or 0.85 percent at 8910.50.

In last eight sessions, the Sensex surged more than 2,200 points and Nifty added over 600 points.

Krishna Kumar Karwa of Emkay Global expects the market to deliver returns of 12-15 percent this year. He feels there is a possibility of the RBI again cutting interest rates at its policy review on February 3.

He sees the central bank cutting rates by 75-100 basis points over the next 12 months, and expects the capex cycle to pick up as a result. According to him, banking and financial services stocks will continue their outperformance streak.

The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent and 0.5 percent, respectively.

Meanwhile, Finance Minister, Arun Jaitley is confident of a turnaround in India, saying he committed to meeting the FY15 fiscal deficit target of 4.1 percent. He reiterates that the government is working towards investor-friendly tax administration.

US President, Barack Obama concluded his India visit today. While addressing an animated audience in New Delhi, he says he is committed to a new chapter for Indo-US ties, reiterating support for India as a permanent member of the United Nations Security Council.

Stocks in action

Banks topped the buying list with the Bank Nifty rising 2.4 percent to end at record closing high of 20,555.25 on hopes of rate cut next week, when the RBI announced its monetary policy.

Axis Bank was the biggest gainer on Sensex, up 4.8 percent as brokerages bullish on the stock. Morgan Stanley is overweight on the stock with an increased target of Rs 840 from Rs 700 per share. The brokerage feels that Axis Bank offers great risk-reward and expects 28 percent EPS CAGR over next 2 years.

India’s largest private sector lender ICICI Bank gained 3.87 percent. HDFC Bank was up 2.4 percent while its rival State Bank of India climbed over a percent. Housing finance company HDFC gained 1.56 percent.

Cigarette major ITC and commercial vehicle maker Tata Motors spiked 3 percent each. Telecom operator Bharti Airtel gained 2 percent.

Car maker Maruti Suzuki saw a record high of Rs 3,704 today, before closing up 2.2 percent at Rs 3688 on the BSE. Profit in Q3 grew 18 percent year-on-year to Rs 802 crore, led by higher volumes, material cost reduction initiatives and favourable forex. Revenue increased 15.4 percent to Rs 12,576 crore and realisations climbed 3.7 percent to Rs 3.90 lakh per unit during the same period.

Defence stocks like BHEL, L&T, Pipavav Defense and Walchandnagar Industries gained 1-7 percent on optimism of US and India breaking a six-year logjam over operationalising the civil nuclear deal and separately deepening defence ties.

Cipla was up 4.5 percent after Teva received USFDA approval for Nexium (USD 1.8 billion heart burn drug). Cipla is expected to supply the drug to Teva.

However, Dr Reddy’s Labs fell 4 percent as reports suggest that the street was expecting an approval for Nexium generic. Ranbaxy closed flat after trading lower for major part of the session as the company lost its chance to retain Nexium 180-day exclusivity.

Shares of Infosys, Mahindra & Mahindra, HUL, Coal India, Bajaj Auto, Sun Pharma and Tata Steel were down 1-3.5 percent. Aluminium major Hindalco Industries was down 1.6 percent after CBI registered fresh case against company in coal scam with respect to allotment of Talabira-I coal block, Odisha.

In the broader space, Mumbai-based Godrej Properties was up 3 percent as third quarter consolidated net profit of the realty company jumped 26.2 percent year-on-year to Rs 47.2 crore, driven by strong revenue.

Max India gained 8.4 percent as the board of directors approved the demerger of company into three companies.

However, Union Bank of India lost 5 percent as its third quarter net profit declined 8.1 percent year-on-year to Rs 302.4 crore, impacted by higher provisions.

Globally, Asian markets closed mixed, largely discounting Grexit worries. Shanghai declined 0.9 percent while Nikkei surged 1.7 percent. Investors will also watch out for the US Federal Reserve meet that will kick off today. European markets were trading marginally lower (at the time of closing of Indian equities).

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