The News International Team
The pre-Budget rally continued for the seventh consecutive session on Thursday as the frontline indices gradually are heading towards all-time highs. In afternoon, it was looking like a halt for six-day rally but late trade rebound pushed the indices higher for another session.
The 30-share BSE Sensex climbed 142.01 points to 29462.27 and the 50-share NSE Nifty rose 26.20 points to 8895.30 while the broader markets closed flat.
Though the market valuations look stretched at current levels, the pre-Budget rally may continue for a while, feel experts. However, there may be a big correction if Budget disappoints, they say.
“The investment case for India is a strong one at the moment,” says Ewen Cameron Watt of BlackRock.
According to him, the combination of declining oil prices and food prices has allowed inflation to come down, along with action taken by the government to deal with more structural long-term risks of inflation in turn that is allowing RBI to start to finally lower rates. He thinks that is a very positive background, particularly with the slow but gradual improvement in the economy in India.
Metals played a key role in today’s trade with the BSE Metal index climbing nearly 4 percent amid ongoing coal block e-auction. Jindal Steel & Power was the biggest gainer on Nifty, up 25.75 percent after the company won back its Gare Palma IV/2 and 3 blocks at Rs 108 per tonne in coal e-auction. The management told CNBC-TV18 that they can use coal from Gare Palma for other plants as well and additional merchant power sales can happen at coal e-auction prices.
Aditya Birla group firm Hindalco Industries won its second mine (in current e-auction) – the Gare Palma IV/5 mine in Chhattisgarh at Rs 3,502 per tonne today. The stock was up 2.7 percent. Among other metals stocks, Tata Steel gained 2.3 percent and Sesa Sterlite jumped 7 percent. Coal India gained 1 percent.
Shares of HDFC, Infosys, Larsen & Toubro, TCS, Mahindra & Mahindra, Bharti Airtel, Tata Power and Coal India advanced 1-2.5 percent. However, ICICI Bank, ITC, Tata Motors, State Bank of India, Axis Bank, Wipro and HUL saw profit booking, down 0.5-1 percent.
Cement companies such as ACC, Ambuja Cements and UltraTech Cement were down 0.7-2.3 percent, possibly reacting to Road & Transport Minister Nitin Gadkari’s comments yesterday that alleged carterlisation by cement companies. Ambuja Cements was also reacting to a weak set of earnings in Q4.
In the broader space, Bharat Forge gained 2 percent after the Kalyani Group announced a defense tie up with Dassault Rafale. The forging company also signed a multi-year contract with Boeing Commercial Airplane to supply titanium forgings for wing components for the Next-Generation 737 and 737 MAX yesterday.
National Fertiliser, FACT and RCF gained 2-5 percent as in a bid to make the cost of fuel uniform & affordable, the oil ministry proposed to pool gas for fertiliser plants.
Tata Motors DVR, Jain Irrigation DVR and Future Retail DVR rallied 2-7 percent after S&P BSE announced rules for considering DVRs in all BSE indices. It will consider including DVRs in Sensex, BSE 100, BSE 200, BSE 500 when indices are rebalanced in June.
GVK Power lost fell 3 percent after the company lost Toki-Sud north block to Essar Power at Rs 1,110 per tonne, which was the most aggressive bid seen in the regulated sector.
The market breadth was weak as about 1381 shares advanced and 1509 shares declined on the Bombay Stock Exchange.