9:50 am FII view:
Mahesh Nandurkar, CLSA says the recent drop in global commodity prices helps India’s macro as it lowers the twin deficits and inflation pressures. He feels while India will likely emerge as a relative beneficiary, a worsening global growth outlook would negatively impact corporate earnings.
According to him, assuming spot prices for commodities and currency, and pushing out India’s economic recovery to FY18, the earnings cut for FY16 and FY17 for coverage universe would be 4 percent and 8 percent, respectively.
He feels sectors with the highest potential earnings cut would be metals and oil, followed by cement, public financials, property and capital goods.
9:40 am Buzzing: Shares of DLF gained nearly 8 percent intraday as its wholly-owned subsidiary, DLF Home Developers (DHDL) and GIC have entered into a joint venture to invest in two upcoming projects located in Central Delhi.
The JV is expected to benefit from GIC’s experience of investing in integrated developments across the globe.
GIC will invest Rs 1990 crore and both projects will be developed under DHDL.
Saurabh Chawla, Senior Executive Director-Finance, DLF said, “We hope that this investment is a beginning of a new relationship with GIC at the project level. We look forward to working together with GIC in many projects, both residential and commercial.”
9:30 am Market check: The market has become extremely volatile. The Sensex is up 35.15 points at 25731.59 and the Nifty is up 6.40 points at 7792.25.
About 846 shares have advanced, 480 shares declined, and 64 shares are unchanged. ITC, Sun Pharma, Axis Bank, Lupin and TCS are top gainers while Hero, ONGC, Tata Steel, Vedanta and Maruti are losers in the Sensex.
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After sharp cuts yesterday, the market has opened higher. The Sensex is up 148.78 points or 0.6 percent at 25845.22 and the Nifty is up 44.20 points or 0.6 percent at 7830.05. About 570 shares have advanced, 135 shares declined, and 34 shares are unchanged.
Lupin, Axis Bank, ICICI Bank, Sun Pharma and Hindalco are top gainers in the Sensex.Among the losers are Hero, ONGC, Bajaj Auto, NTPC and Tata Motors.
The Indian rupee declined in early trade. It has opened lower by 10 paise at 66.32 per dollar against 66.22 a dollar on Tuesday.
Himanshu Arora, Religare feels the rupee is expected to trade slightly weak today amid a slew of negative data releases from US to China. He says the range for rupee today is seen between Rs 65.95-66.60/USD.
Dollar slipped against the yen and the euro as the fall in equity markets forced investors to unwind well established trades, sending the euro and safe-haven yen higher.
Meanwhile, mainland shares led losses in Asia, tracking offshore losses driven by persisting concerns over the health of China’s economy.
However, Japan’s Nikkei 225 index managed to stage a rebound by mid-morning trade, probably inspired by the near 1 percent rises in the S&P 500 futures and Dow futures in early Asian trade.
Wall Street ended in correction territory overnight, with the major averages closing down nearly 3 percent in their third-largest daily decline for 2015. In their worst start to September in 13 years, the Dow Jones Industrial Average and S&P 500 had their worst first-of-the-month trading day of a month since March 2009. The tech-heavy Nasdaq had its worst first trading day since October 2011.
Crude prices declined sharply with Nymex crude sliding to 44 dollars a barrel. Also a report showed US crude stocks rose last week.
In the precious metals space, gold prices remained steady at around USD 1130 an ounce.