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Sensex, Nifty under pressure; IT outperforms, Maruti gains

11:00

The News International Team

11:55 am India PMI: Growth in India’s factory activity slipped in January from December’s two-year high as new orders rose at a weaker rate despite factories keeping price increases to a minimum, a business survey showed on Monday.

Cooling growth and inflation could give the Reserve Bank of India reason to cut interest rates again in the coming months but any move may depend on the government’s annual budget due on Feb. 28.

The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, fell to a three-month low of 52.9 in January from December’s two-year high of 54.5.

It has been above the 50 level, which denotes growth, since November 2013 but missed poll expectations for a smaller drop in January, to 53.5.

11:40 am Auto sales: Car market leader Maruti Suzuki sold 1.16 lakh units in January, a growth of 13.7 percent compared to 1.02 lakh units sold in the year-ago period driven by domestic as well as exports growth.

Domestic sales grew 8.7 percent year-on-year to 1.05 lakh units during the first month of the calendar year 2015, largely supported by Ciaz car (that launched in October 2014). Exports jumped 89 percent to 11,047 units during the same period.

Passenger vehicles sales climbed 7.9 percent to 89,014 units in January from 82,461 units in same month last year. Ciaz (which falls into the mid-size car segment) along with SX4 reported sales at 6,005 units in January against 191 units in the year-ago month.

11:30 am Result analysis: Shares of HCL Tech jumped over 5 percent, touching record high at Rs 1889 per share intraday. Investors have been hurriedly buying the IT company’s stocks after it posted stellar December quarter earnings on Friday.

Brokerages maintain bullish stance on the stock as HCL Tech’s profit increased 2.3 percent sequentially to Rs 1,915 crore during the quarter. CLSA reiterates a buy rating and increased target price by 15 percent to Rs 2200 per share. It has also upgraded its FY16/17 EPS by 7/8 percent and feels that strong deals, hiring and margin levers, suggest continued earnings surprises and possibility of a re-rating.

Citi also maintains buy with an increased target of Rs 2175 from Rs 1980. Citing reasonable valuations HCL Tech is Citi’s only buy in the Indian IT services space.

Don’t miss: Sun Pharma, Ranbaxy at new high on USFTC conditional nod

The market starts the week on a subdued note. The Nifty is down 22.65 points at 8786.25 as financials, auto stocks and select FMCG continue to weigh. The Sensex is down 87.41 points at 29095.54.

About 1409 shares have advanced, 858 shares declined, and 218 shares are unchanged.

Sun Pharma, Hindalco, Maruti, Wipro and L&T are top gainers in the Sensex while Dr Reddy’s Labs, Bajaj Auto, HUL, ICICI Bank and Coal India are losers.

IT stocks continue their outperformance into today. Tech Mahindra gained reacting to its quarterly earnings that were released on Friday evening. The company reported a dollar revenue growth of 2.7 percent higher than estimates constant currency growth at 4.9 percent, EBIT margins too.

Globally, Asian markets are lower as lower China PMI sparks growth fears.The final HSBC PMI fell to 49.7 in January for China below flash estimates of 49.8, the data comes a data after the official PMI indicated a contraction for the first time in 2.5 years. Brent crude is above USD 50 a barrel.

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