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Sensex, Nifty firm; ITC, HDFC, Coal India early gainers

09:15

The News International Team

9:55 am Earnings analysis: Earnings of India’s largest companies fell more than expected in the latest quarter, adding to scepticism over a stock market rally that started in early 2014 and official figures showing the country’s economic growth outpaced China’s. The combined net income of 100 firms with a market valuation of more than USD100 million dropped 6 percent in the three months ended in December from a year earlier. That compares with a 0.5 percent rise expected by analysts covering the companies.

It was the third consecutive quarter that profits had failed to match up to expectations, meaning companies have disappointed each quarter since Prime Minister Narendra Modi was elected in May last year, a victory that drove share prices to record highs.

9:45 am FII view: Timothy Moe, Goldman Sachs says the brokerage remains strategically positive on India, but thinks it makes sense to hedge potential downside around the Budget, especially since the current results season has been soft.
“We suggest short-dated put-spreads on the India banking sector, on which our India financials analyst has recently expressed caution, as a way of doing so. Overall, we find investors concerned about India. Stocks well positioned for a dividend increase include ITC, HCL Technologies and Tech Mahindra,” Moe adds.

9:30 am Slide: Shares of Hero MotoCorp fell over 4 percent intraday as promoters are selling some stake in the company. According to CNBC-TV18 sources, promoters of the two-wheeler manufacturer will sell 3.5 percent or 70 lakh via block deal today. It is learnt that the price band is decided at Rs 2664-2720 per share.

According to sources, promoters are likely to raise around USD 300 million via the stake sale. Barclays and Kotak Mahindra are bank book runners of the sale.

It had posted 11.11 percent rise in its net profit at Rs 582.98 crore for the quarter ended December 31, 2014. Net sales of the company, however, declined marginally to Rs 6,792.51 crore during the October-December period.

Don’t miss: Can Eicher Motors touch Rs 18000 per share soon?

The market has opened flat after a day break mid-week, but soon made a marginal gain. The Sensex is up 93.89 points at 29229.77 and the Nifty is up 25.80 points at 8835.15. About 771 shares have advanced, 276 shares declined, and 144 shares are unchanged.

Coal India, ITC, HDFC, NTPC and HUL are top gainers in the Sensex. Among the losers are Hero, Sesa, Tata Motors, Bharti and Bajaj Auto.

The Indian rupee opened flat at 62.20 per dollar against 62.16 Monday. The euro rebounds helped by a bounce in German investor sentiment and hopes that Greece will find a common ground with its euro zone partners for support beyond its current bailout programme.

Pramit Brahmbhatt of Veracity said, “Overnight US markets traded slightly strong and taking cues from this Asian markets which have also opened on a positive note. Though investors are expected to trade cautiously ahead of euro zone meeting.”

Globally, US stocks ended higher after encouraging reports from Greece sent the S&P 500 to a record. Greece intends to ask for an extension of its loan agreement with the euro zone today.
Meanwhile, European stocks closed mixed as fears over Greece’s debt problems continued to make investors nervous.

Asian markets, however, are smartly in the green with the Nikkei surging to new eight-year highs as the yen weakened to 119.1. Trading volumes in Asia will be light ahead of the Lunar New Year holiday. Singapore, Malaysia markets will be open for half a day while China, Taiwan and South Korea will be shut today.

In commodities, Brent Crude hit a 2015 high of USD 63 per barrel in trade on Tuesday. It is currently trading at around USD 62 per barrel.

Precious metals gold and silver fell to six-week lows, while platinum fell to the lowest since 2009, on signs that Greek banks will continue to get emergency funding despite a breakdown in debt talks between their government and euro zone partners.

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