The News International Team
9:50 am Market outlook: The market is technically overbought and unlikely to rise much in the near term, feels Sanjay Dutt of Quantum Securities. He compares the ongoing rally with the frenzied bull market of 2007-08, and says the recovery in corporate earnings has already been discounted.
In an interview to CNBC-TV18, Dutt says the market still looks from a medium term perspective, but the government needs to address the issues being faced by small and medium sized companies.
He expects liquidity flows to be strong, but the supply of share offerings is expected to cap market gains.
Dutt is bullish on financial services and banking stocks, and is betting on capital goods and EPC (engineering procurement and construction) companies to play the domestic recovery.
9:40 am Buzzing: Shares of HCL Tech surged 11 percent, hitting record high at Rs 1834 per share intraday after it posted stellar December quarter earnings.
The fourth largest software services exporter in India, surpassed street expectations on every parameter by reporting 2.3 percent sequential growth in profit after tax at Rs 1,915 crore. Profit was expected at Rs 1,770 crore on revenue of Rs 8,950 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18.
Revenue grew 6.3 percent quarter-on-quarter to Rs 9,283 crore and dollar revenue rose 4 percent to USD 1.49 billion during October-December quarter (as against expected dollar revenue of USD 1.477 billion).
9:30 am Brokerages on OFS: Brokerages are mixed on Coal India with Edelweiss upgrading it to buy with a target price of Rs 442 per share. It feels that volumes push and government’s sharp focus on doubling CIL’s production by FY20 will bring cheer to the stock. Edelweiss also says that saving from low diesel prices to aid margin expansion as every Rs 1/litre drop in fuel cost saves Rs 100 crore for Coal India.
Nomura has a buy rating with a target of Rs 443 per share. “As has historically been the case, we believe Coal India may well consider declaring an interim dividend next month. As investors who buy stocks in the upcoming OFS would be allocated shares on February 2/3, prospects of an imminent interim dividend may well act as a sweetener,” Nomura says.
However, JP Morgan is underweight on the stock with a price target of Rs 325 per share as given the stake sale there is less room for a repeat of last year’s dividend. “There is no explicit dividend policy in place and hence predicting dividend is difficult. However, the combination of a stake sale and potentially lower dividends should result in the stock being under pressure,” it says in a note.
Don’t miss: Asia rallies as oil gets a reprieve; earnings in focus
It is a record high opening as the Nifty approaches 9000-mark on first day of February F&O series. The 50-share index is up 44.20 points at 8996.55. The Sensex is up 140.11 points at 29821.88, and the Nifty About 497 shares have advanced, 115 shares declined, and 151 shares are unchanged.
Coal India is down 4 percent as its offer-for-sale opens today. Bharti Airtel, HDFC, Tata Motors, SBI and Sesa Sterlite are top gainers in the Sensex.
The Indian rupee has opened at 61.79 per dollar, up 7 paise compared to previous day’s closing value of 61.86 a dollar.
Pramit Brahmbhatt, Veracity says continuation of FII inflows coupled with some profit booking in local equities may impact the rupee in trade today. He expects USD-INR to trade in the range of 61.40-62.40/USD.
US markets bounced back from a two-day rout, led by a reverse in the price of crude and strong job market data. European markets closed mixed on Thursday, with a sharp decline in Shell shares hitting the UK’s FTSE 100 index and Asian markets were trading higher in morning trade on a positive US handover.
In commodities, Nymex Crude held steady around USD 44 dollars per barrel as US jobless data signaled further strength in economy. Brent crude was trading around USD 49. Gold edged higher after falling more than 2 percent to a two-week low overnight on concern over a looming increase in US interest rates.