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Sensex, Nifty volatile; JSPL tanks 12%, Suven most active


The News International Team

03:15 pm Market cap leader: Drug major Sun Pharmaceutical Industries surpassed SBI, country’s largest public sector lender, in terms of market valuation.

Sun Pharma’s market capitalisation (m-cap) increased to Rs 2,15,394.82 crore, following over one percent rally in the stock at the BSE, overtaking SBI whose valuation stood at Rs 2,09,488.41 crore during the afternoon trade.

With this, Sun Pharma now stands at eight position in the list of top-10 most valued companies in terms of their market capitalisation, followed by SBI at ninth place. TCS is the most valued Indian company with a market cap of Rs 5,04,068.85 crore, followed by RIL, ITC, ONGC, HDFC Bank,Infosys, CIL, Sun Pharma, SBI and HDFC.

Market capitalisation of a listed company corresponds to the cumulative market price of all its shares. This figure changes daily with change in stock price.

03:05pm Market Update: The market gained strength again in late trade with the Sensex rising 261.03 points to 28698.74 and the Nifty climbing 70.05 points to 8703.20. Dr Reddy’s Labs rallied 4 percent. HDFC and Tata Motors jumped 2 percent each. Hindalco Industries shot up nearly 6 percent.

02:50pm HDFC Securities on Suzlon: Brokerage house HDFC Securities initiated coverage with a buy on Suzlon Energy and target price of Rs 34 apiece.

Having faced multiple crises over FY09-14, the brokerage believes Suzlon is on the cusp of a turnaround. It has aggressively reduced debt from its heavily levered balance sheet by divesting its German subsidiary Senvion (for Euro 1 billion) and via a preferential issue of Rs 1,800 crore to Dilip Shanghvi and Associates (DSA).

“These developments will enable the company to not only reduce debt but also provide much needed working capital to ramp up business in the rapidly growing Indian wind energy market,” said HDFC Securities in its note.

With the NDA government’s ambitious plans for renewable energy, the brokerage expects favourable policy environment for wind power to continue. According to the note, Suzlon is among a handful of listed companies levered to India’s fast growing renewables industry.

Aided by significant operating and financial leverage, it expects Suzlon’s earnings to grow manifold over the next few years.

02:30pm Cairn in Focus: Rating agency Moody’s today said the Rs 20,465 crore tax demand raised on Cairn India is negative for its parent company Vedanta Resources.

“The tax dispute comes at a time when Vedanta is already struggling to stave off the effects of weak oil prices. If the liability materialises, Vedanta’s credit profile would be weaker than the parameters required by its current rating…” Moody’s VP and Senior Credit Officer Alan Greene said.

Last week, Income Tax Department has slapped a Rs 20,495 crore tax demand on Cairn India for allegedly failing to pay taxes on gains made by its former parent (Cairn Energy) in a share transfer transaction about eight years ago.

“Vedanta Resources Plc’s ‘Ba1’ corporate family rating and ‘Ba3’ senior unsecured ratings are under negative pressure because of a demand by Indian revenue authorities that Cairn India should pay a USD 3.2 billion tax liability,” Moody’s Investors Service said.

An adverse outcome for Vedanta in relation to the tax dispute could also lead to a ratings downgrade, it added.

It said Vedanta’s credit metrics are already at the lower end of its rating category. The rating agency had revised the company’s ratings outlook to negative in January 2015 to reflect the company’s likely lower earnings due to depressed global oil prices.

Moody’s said it has kept Vedanta’s ratings and outlook unchanged, because it believes the tax claim will not lead to any immediate cash demand, and that the final amount could vary, given that Vedanta is challenging the liability.

02:00pm Market Check: The market came off day’s high in afternoon trade due to selling in banks and technology stocks. The Sensex rose 83.79 points to 28521.50 and the Nifty advanced 23.80 points to 8656.95.

The BSE Midcap and Smallcap indices lost gains too, trading flat. About 1224 shares have advanced, 1495 shares declined, and 175 shares are unchanged on the BSE.

Sachin Shah, Fund Manager, Emkay Investment Managers believes the market is still in a consolidation phase and the rally seen in the market today could be on back of global market rally.

Also after the fall seen across the board, the market could be witnessing some buying, he adds.

Hindalco topped the buying list on Sensex, up 5 percent. Dr Reddy’s Labs, Tata Motors, Sesa Sterlite, BHEL and Cairn India climbed 1.4-2.6 percent.

However, Jindal Steel tanked 12 percent as media report said the government is expected to reject 2 bids from JSPL’s Gare Palma & Tara coal blocks. Infosys, Wipro, Coal India, Bharti Airtel, HUL, Bank of Baroda and PNB declined 0.8-2 percent.

Gulf Oil Corporation, South Indian Bank, Suven Life, HCL Technologies, Jindal Steel, M&M and Reliance Industries were most active shares on exchanges.


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