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Sensex closes above 29000, up 290 pts post SBI, MM Q3 nos

16:25

The News International Team

The market staged spectacular performance on Friday, rising over a percent led by third quarter earnings from SBI and Mahindra & Mahindra. Positive global cues also led support to the market.

The 30-share BSE Sensex closed above the 29000 level for the first time since February 3, up 289.83 points at 29094.93, continuing upside for the fourth consecutive session.

The 50-share NSE Nifty too climbed over 8800 in late trade, up 93.95 points to 8805.50. The broader markets underperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.7 percent and 0.35 percent, respectively.

Experts believe the market may continue its upside with intermittent small profit booking ahead of Budget (to be held on February 28).

Abhay Laijawala of Deutsche Equities is bullish on the market going into the Budget, saying sectors like infrastructure, banks & financials and urban consumption will be key beneficiaries.

For the week, the Sensex gained 1.3 percent and Nifty jumped 1.7 percent with the Bank Nifty rising over 3 percent.

Banks, FMCG, auto, healthcare and select infrastructure stocks helped the market rally.

India’s largest lender SBI surged 8 percent after posting a stellar set of earnings in the third quarter. Asset quality remained stable as fresh slippages and restructuring came in lower than Q2. Profit jumped 30 percent led by higher other income and operating profit while higher provisions restricted the bottomline growth.

Another strong set of earnings came in from Mahindra & Mahindra. The stock rallied 5 percent after its third quarter earnings beat estimates. An exceptional gain of Rs 299 crore aided profit.

State-run oil retailer Bharat Petroleum Corporation turned profitable with the third quarter net profit at Rs 551 crore against loss of Rs 1,089 crore in same quarter last fiscal. Higher other income and lower finance cost boosted profitability. The stock gained 2.4 percent. However, IOC declined 1.5 percent as its Q3 loss widened to Rs 3,285 crore from Rs 961.5 crore in the year-ago period due to higher inventory loss.

State-run steel maker SAIL gained more than 2 percent on beating street estimates today. Profit declined 18 percent against forecast of a 24 percent decline. Operating profit spiked 4.3 percent against estimates of a 12 percent fall.

Sun Pharma gained 1.8 percent ahead of third quarter earnings (to be announced on Saturday). Profit of the drug maker may rise just 7 percent Y-o-Y to Rs 1,638 crore due to likely lower operating performance. However, ONGC and HDFC Bank fell 1-2 percent ahead of their quarterly earnings (on February 14).

Coal India gained 2 percent despite a 16.2 percent drop in Q3 profit. Brokerages are bullish on the stock hoping that fourth quarter may benefit from higher e-auction volume. Citi suggests buying Coal India expecting that March quarter to benefit from higher e-auction volumes (lower costs), incentive premium and lower diesel prices.

Cipla rose 0.9 percent despite Q3 numbers missed estimates and cutting FY15 growth guidance. Brokerages are positive on FY16 prospects of the company. Exports are expected to pick from Cipla supplying Nexium formulations to Teva with profits to start reflecting from Q1FY16. Bank of America Merrill Lynch retains buy rating on Cipla and expects 18 percent CAGR in sales and 200 basis points EBITDA expansion over FY15-17.

Among others, shares of TCS, ITC, ICICI Bank, HDFC, Wipro, Maruti Suzuki and Hero Motocorp were prominent gainers, up 1-3 percent.

However, BHEL lost 3 percent on disappointing set of earnings in Q3. Profit fell 69 percent and revenue declined 28 percent. JP Morgan maintains underweight rating on the stock with target price of Rs 200 per share and cut cut FY15 and FY16 EPS estimates by 27 percent and 13 percent.

Infosys and GAIL were other losers on Sensex, down 0.8 percent and 4 percent, respectively.

In the broader space, Punj Lloyd declined 3 percent on reporting a loss of Rs 148 crore in Q3 against profit of Rs 1.2 crore while Mphasis gained 3.5 percent post numbers matched street expectations.

Lupin rose 3.7 percent as the RBI says FIIs can now invest up to 49 percent in company. As of December 2014 FIIs held 31.77 percent in the company.

Global cues were strong today as most Asian markets posted gains with Shanghai and Hang Seng rising 1 percent. European markets like France’s CAC, Germany’s DAX and Britain’s FTSE rose over 0.6 percent, extending yesterday’s rally. Brent crude climbed over USD 60 a barrel, up 1.25 percent today.

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