The News International Team
It was a strong start to the new financial year 2015-16 on Wednesday as the market rallied more than 1 percent led by banking & financials, ahead of RBI policy (scheduled to be held on April 7). The broader markets continued to outperform benchmarks.
The 30-share BSE Sensex rallied 302.65 points to 28260.14 and the 50-share NSE Nifty climbed 95.25 points to 8586.25 on further short covering in beaten down stocks. The BSE Midcap and Smallcap indices jumped 1.5 percent and 2.4 percent, respectively.
Adrian Mowat of JPMorgan believes the combination of a pick-up in economic and earnings growth as well as a fall in interest rate would help markets to stay strong going forward.
Meanwhile, Dipen Sheth, head-Institutional Research, HDFC Securities expects the market to gain significantly over the next 5-10 years. He believes it is ‘super period’ to be in equities.
The market will remain shut on Thursday and Friday for Mahavir Jayanti and Good Friday, respectively.
During the truncated week, the Sensex and Nifty rallied 2.9 percent led by broad based buying. The CNX Midcap was up 3.2 percent and BSE Smallcap surged 6.8 percent. Bank Nifty, BSE Pharma, Realty, FMCG and Capital Goods indices gained 3-4 percent.
Today, Sun Pharma topped the buying list on Sensex, up 5.5 percent to end at record closing high of Rs 1078.55 after Morgan Stanley retained its overweight rating on the stock. The brokerage raised target price from Rs 995 to Rs 1,241 and estimated 24.6 percent CAGR for F16-F17 against 18.6 percent for the Street. In the news after market hours, Sun Pharma said it settled litigation for generic Angiomax with The Medicines Company, US.
Ranbaxy Labs too saw record closing high of Rs 859.90, up 5.6 percent on its last day of trading session before merger with Sun Pharma.
Dr Reddy’s Labs rose 1.65 percent on acquisition of select portfolio of the established products business of Belgium-based company UCB in India for Rs 800 crore. Lupin was up 1.6 percent on launch of generic Exforge tablets in US.
Bank Nifty climbed more than 2 percent today on hopes of a surprise move from RBI in its policy next week but economists do not expect any rate cut. Country’s largest lenders State Bank of India and ICICI Bank surged 2.4 percent each while rivals HDFC Bank and Axis Bank gained 1-1.6 percent.
Auto stocks were in focus. Commercial vehicle maker Tata Motors spiked 2.65 percent ahead of March auto sales data. Mahindra & Mahindra gained 1 percent despite weak sales data but the company said it would exit Brazil due to changes in regulation and weaker currency. Hero Motocorp rose 0.5 percent on reporting a 1.5 percent year-on-year growth in March sales.
Ashok Leyland was up 0.8 percent on strong 24 percent growth in sales of commercial vehicles whereas car maker Maruti Suzuki fell 1.5 percent on reporting a 1.6 percent decline in March sales and 26.5 percent drop in exports.
However, the sentiment was marred by technology stocks after weak outlook about their January-March quarter earnings. HCL Technologies tanked 4 percent as the company warned of currency impact owing to the currency fluctuations. Adverse cross currency will impact dollar revenue by 280 basis points and EBIT margin by 80 basis points, said the company, adding it is now confident of achieving 21-22 percent EBIT margins which is lower than Q2FY15. Infosys dropped 2 percent and TCS declined 0.14 percent, which will announce their Q4 earnings on April 24 and April 16, respectively. HCL Technologies will announce earnings on April 21.
Engineering and construction major Larsen and Toubro was up 0.9 percent on Rs 5,580 crore turnkey order from NTPC for setting up a 2×660 MW greenfield ultra-supercritical thermal power plant in Madhya Pradesh.
Among others, ITC, HDFC, Reliance Industries, Bharti Airtel, HUL, Tata Steel and Hindalco Industries gained 1-2 percent while BHEL and GAIL were down 1 percent.
Fertilser stocks like Chambal Fertilisers, Deepak Fertilisers, FACT, GNFC, GSFC, NFL, RCF and Zuari Global shot up 2-12 percent as cabinet approved gas pooling for the sector for 30 urea manufacturing units. Zuari Agro said its current gas cost would go down to USD 11-12 per mmbtu and will also reduce the working capital cycle.
Advancing shares outnumbered declining ones by a ratio of 2015 to 693 on the Bombay Stock Exchange.
Global markets too were upbeat today, Shanghai (up 1.7 percent) and Hang Seng (up 0.7 percent) closed with solid gains while European markets gained 0.6-1 percent (at 16 hours IST) after a solid round of manufacturing data, euro zone PMI for March (which was revised upwards to 52.2 versus a reading of 51 in February).