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Sensex, Nifty consolidate; Bharti Airtel, Coal India rally


The News International Team

11:30am Market Expert: Indian equities are headed lower near term because of the nervousness in global markets as well subdued corporate earnings growth, says Andrew Holland, CEO, Ambit Investment Advisors.

In an interview with CNBC-TV18, Holland says he expects global equities to correct 5-10 percent in the short term and sees upheaval in currency markets because of the conflicting monetary policies being followed by central banks of the major economies.

He says the easy money has already been made and investors should brace for some tough months ahead. He sees little scope for an expansion in the forward price to earning multiple of the Indian market beyond 17, and does not expect the Nifty to top 9000 anytime soon.

11:00am Market Check:

The market continued to consolidate today after yesterday’s steep fall. The broader markets managed to outperform benchmarks with the BSE Midcap and Smallcap indices rising 0.5-0.7 percent.

The 30-share BSE Sensex rose 24.10 points to 28868.88 and the 50-share NSE Nifty advanced 7.30 points to 8764.05. About 1393 shares have advanced, 890 shares declined, and 187 shares are unchanged on the BSE.

Bharti Airtel and Coal India topped the buying list on Sensex, up 2.5 percent each. Bharti may be reacting to some moderation in bidding in the telecom auctions. On day 5, the jump in bid price on a day on day basis was only 2 percent for 900 MHZ against 5 percent in previous day raising hopes of some moderation in bidding.

CLSA maintains buy rating on Coal India with a target price of Rs 435 apiece. The brokerage believes that the aggressive bids in the coal mine auctions by non-power companies has created a case for a sharp hike in Coal India’s fuel supply agreement (FSA) prices for non-power customers.

“In fact, the coal ministry is already contemplating a possible auction of Coal India’s old FSAs. Coal India has not taken a price hike since May-13 and has seen earnings decline for two successive years. We see a decent possibility of a large price hike for non-power consumers in FY16, which would be a catalyst for the stock. Improving production growth and potential price hikes underpin our positive stance,” CLSA explains.

Tata Motors, Larsen & Toubro, Mahindra & Mahindra, Cipla, Bajaj Auto and BHEL gained 1-2 percent whereas HDFC, TCS, HUL, ONGC, Wipro and GAIL fell 1-2 percent.

Monnet Ispat climbed over 9 percent as the company is looking to sell stake in its power and sponge business. Additionally the company won the Utkal C block for a negative bid price of Rs 770 per tonne.

Dish TV gained 3 percent as CLSA maintains its buy on the stock. According to the report, the company is in a sweet spot as its scale and content deals imply margins should strengthen driving a rerating and ARPUs are moving up faster than expected.

Asian markets are mostly weak overlooking the better-than-expected Chinese inflation data and positive lead from Wall Street. Dollar index hit a 3-month high with gold near 3-month lows and Brent below USD 60 a barrel.

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