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Sensex volatile, Midcap outperforms; Reliance, TCS rally


The News International Team

10:58am Buzzing Stocks: IL&FS Transportation has received letter of award for development of 8 rail overbridges in Gujarat. The company says total project cost for road overbridges at Rs 251 crore. Stock gained 2.8 percent.

Tata Power has commissioned unit 1 of 126 MW Dagachhu hydro project in Bhutan. Stock rose 0.4 percent.

10:45am Expert view on Sun Pharma deal: GlaxoSmithKline and Sun Pharmaceutical Industries announced that their respective wholly owned subsidiaries have reached an agreement related to GSK’s Opiates business in Australia. The current GSK Opiates business including related manufacturing sites in Latrobe (Tasmania) and Port Fairy (Victoria) along with the inventories will be taken over by the Sun Pharma. The product portfolio consists of poppy-derived opiate raw materials that are primarily used in the manufacture of analgesics for the treatment of moderate to severe pain.
While commenting on this deal, Sarabjit Kour Nangra, VP Research – Pharma at Angel Broking says Sun Pharma has an established footprint in this market and believes it is well-placed to take the business forward.

“The global Opiates market holds good potential and the addition of GSK’s Opiates business will strengthen its positioning further. The financial terms of the transaction are not disclosed. The transaction closure is subject to customary closing conditions and requisite regulatory and other approvals, and is expected to close by August 2015. Thus, the acquisition will fully reflect in FY2017. We remain neutral on the stock,” she adds.

10:30am FII View: Jonathan Garner, managing director, Morgan Stanley is overweight on India and has a Sensex target of 32500. He expects India to outperform other Asian markets. He is overweight on China too.

He is bullish on industrial cyclicals, private sector financials and consumer discretionary. He is lukewarm on software names.

On the economic front, he says inflation targeting is a good measure, though he is a little disappointed with 3.9 percent fiscal deficit number.

10:00am Market Check

The market recouped early losses amid choppy trade. The Sensex rose 58.39 points to 29517.53 and the Nifty climbed 8.65 points to 8965.40.

The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising 0.8 percent each. Advancing shares outnumbered declining ones by a ratio of 1291 to 712 on the Bombay Stock Exchange.

Sakthi Siva, Credit Suisse says with MSCI Asia ex-Japan up 8 percent from the lows of December 17, the key question for investors is whether it is time to take profits.

“If we look at the last two years, the answer appears to be yes as the Index peaked with price-to-book at 1.58x in September 2014 & November 2013 and the current price-to-book is already 1.57x,” she adds.

TCS and Reliance Industries topped the buying list on Sensex and were also the major contributors to Sensex’ gains, rising 2 percent each. HDFC, Sun Pharma, Wipro, Dr Reddy’s Labs, Sesa Sterlite and Bajaj Auto gained 1-1.7 percent.

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