The market maintained its northward journey for the fourth consecutive session on Wednesday with the Nifty conquering 8700 level. The broader markets also moved in tandem with benchmarks. Positive global cues and banks passing on rate cuts to system boosted sentiment today. The 30-share BSE Sensex jumped 191.16 points to 28707.75 and the 50-share NSE Nifty rallied 54.10 points to 8714.40 supported by technology, FMCG, Coal India and Reliance Industries. Sanjay Dutt of Quantum Securities feels the risk reward is now favorable for long term investors. He is positive on banks, NBFCs and midcap capital goods. Asian markets too were strong today as Hang Seng sky rocketed to a 961-point gain, up 3.8 percent at a seven-year high while Shanghai topped 4000 for the first time ever, after Bank of Japan kept its massive monetary stimulus plan intact. Back home, banks and realty stocks remained in focus today. Leading banks like SBI, HDFC Bank, ICICI Bank and Axis Bank cut lending rates by 15-25 basis points yesterday after the RBI nudged banks to lower rates as the central bank has already cut repo rate by 50 basis points in 2015. SBI and HDFC Bank were up 0.2-0.6 percent whereas ICICI Bank and Axis Bank fell 0.5-0.7 percent. Real estate was one of the top performing sectors after the cabinet approved the Real Estate Development and Regulation Bill that paved the way for setting up a regulator for the sector. HDIL said the bill was a positive move which will increase transparency in the sector. Shares like Brigade Enterprises, HDIL, Indiabulls Real, Puravankara Projects, Sobha and Sunteck Realty rallied 2-8 percent. Coal India was the biggest gainer on Sensex, up nearly 6 percent after the government removed the cap on e-auction sales volumes. Bipin K Saxena, Director-Marketing, CIL said the company was looking to sell more coal via the e-auction route, targeting 10 percent of total sales via e-auction route. Index heavyweight Reliance Industries was the biggest contributor to Sensex gains, up 4 percent. Royal Dutch Shell will buy the BG Group in a cash and stock deal worth a whopping USD 70 billion, the biggest deal in the oil & gas sector in a decade. State-run oil marketing company BPCL surged 3 percent after UBS upgraded the stock to buy with increased target price of Rs 945. The brokerage said it ranked best amongst peers. Drug maker Dr Reddy’s Labs climbed 2 percent as the company and its subsidiary Promius Pharma filed three new drug applications with the US Food and Drug Administration. While reiterating overweight rating with a potential upside of 15 percent, Barclays believes these filings can translate into launches in this segment from FY17E onwards and revenue potential is likely to be USD 30-100 million for each filing with the entire segment likely to be worth USD 500 million over the next 4-5 years. However, Sesa Sterlite was down 2 percent after S&P downgraded Vedanta’s credit rating to BB- from BB with a negative outlook citing weak financial performance for atleast 12 more months because of low oil prices. Among others, Infosys, TCS, ITC, Bharti Airtel, Cipla and GAIL gained 1-2.5 percent whereas HDFC, Hero Motocorp and ONGC fell 1-2 percent. The BSE Midcap Index gained 0.7 percent and Smallcap jumped 1.8 percent. Advancing shares outnumbered declining ones by a ratio of 1758 to 1020 on the Bombay Stock Exchange. In the broader space, Glenmark Pharma shot up nearly 5 percent after the cabinet committee on economic affairs approved hiking company’s FII limit to 49 percent from 35.07 percent. Additionally the company’s US arm’s pricing investigation has been concluded which is not expected to materially impact the company’s cashflow. Rural Electrification Corporation gained 2.6 percent as its offer for sale got fully subscribed. The government is looking to rake up around Rs 1,550 crore via the offer for sale. Midcaps like Ess Dee Aluminium, Kitex Garments, Bajaj Hindusthan, Prism Cement, Geometric, Amtek Auto, JK Tyre, HCL Infosystems, India Cements, IRB Infrastructure, Vakrangee and Crompton Greaves surged 4-20 percent. Meanwhile, Prime Minister, Narendra Modi launched Mudra or the Micro Units Development & Refinance Agency today. The NBFC has a corpus of Rs 20,000 crore and credit guarantee corpus of Rs 3,000 crore. Modi expects traditional banking system to move towards MUDRA model in 1 year, saying it will provide the bottom up push needed to expand GDP. India’s aviation sector reclaimed its pride as the US regulator Federal Aviation Authority upgraded air safety rating, which was shot in the arm for Air India and Jet Airways which can now sign code-share agreements with US airlines.
Tradewalla 