1:55 pm Market check:
The Sensex is up 302.64 points or 1.2 percent at 25196.45, and the Nifty gains 93.65 points or 1.2 percent at 7652.45. About 1214 shares have advanced, 1285 shares declined, and 112 shares are unchanged. Tata Steel is up 6 percent, GAIL and BHEL are up 5 percent. Other gainers are ICICI Bank and Vedanta. HUL is down 3 percent, Cipla, Dr Reddy’s Labs, Lupin and Bharti Airtel are major losers in the Sensex.
1:40 pm Interview: N Kamakodi, MD & CEO of City Union Bank is very optimistic of growth for the bank going forward too. In an interview to CNBC-TV18 he said the credit growth for FY16 would be around 12-15 percent although things have to yet improve on the ground.
City Union Bank has been a standout performer amongst the banking space. While most banks year to date have given up gains, City Union has lost only one percent.
According to him the net interest income growth rate will also follow credit growth and would be in tune of 15 percent for FY16.
On the non-performing assets (NPA) front although, the stress is reducing but is still higher than previous decade and so, he envisages the slippages in FY16 to be around 2-2.25 percent.
1:30 pm Debt cut measures: In a move to reduce its debt, Jaiprakash Power Ventures has concluded the sale of its two hydro-power plants to JSW Energy. The two plants include Himachal Baspa Power Company Limited (HBPCL) assets, i) 300 MW Baspa- II HEP, ii) 1092 MW Karcham Wangtoo HEP. They have been sold at an Enterprise Value (EV) of Rs 9,700 crore.
Further, JPVL has also paid a compensation of Rs 150 crores to HBPCL, with profit and loss from these plants accruing to it from 1st September 2015.
In addition, the two companies have entered into a binding Memorandum of Understanding (MoU) for JP Power Ventures 500 MW Bina Thermal Power Plant.
1:20 pm Buzzing: Shares of GAIL jumped 7 percent. Nomura maintains buy rating on the stock but slashed target price by 8-10 percent to Rs 410 per share. However, the brokerage is still convinced of sharp growth ahead warning July-September likely to be lacklustre. Nomura also adds that second half will be good for all segments.
In a August report, Credit Suisse, had warned that profit and loss impact of petchem expansion may keep earnings depressed. According to its estimates, GAIL’s take-or-pay liability can be USD 0.9 billion by December 2015.
The state-run gas transmission company’s first quarter net profit fell 17 percent sequentially to Rs 424.14 crore, dented by loss in petchem business and lower other income.
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The market is surging ahead. The Sensex is up 277.94 points or 1.1 percent at 25171.75 and the Nifty is up 87.55 points or 1.1 percent at 7646.35. About 1109 shares have advanced, 1323 shares declined, and 106 shares are unchanged.
GAIL, Tata Steel, BHEL, Vedanta and ICICI Bank are top gainers while HUL, Cipla, Lupin, Bharti Airtel and Dr Reddy’s Labs are major losers.
Mark Matthews of Bank Julius Baer says a relief rally is on the cards and the immediate trigger will be the US Federal Reserve’s decision on interest rates next week. However, he is not sure if the relief rally can sustain. Factors like the macro data in China, and for India, the impending Bihar elections will influence sentiment, he says.