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Monday 24 November 2014

Nifty breaks 8500; metals melt, banks under pressure

10:45am Market Corrects

Equity benchmarks declined further with the Sensex falling 148.74 points to 28350.80 and the Nifty losing 64.45 points to 8465.70.

About 567 shares have advanced, 1783 shares declined, and 62 shares are unchanged.

Sanjay Dutt, director, Quantum Securities is not bearish on the Indian market; however he cautions that prices have run up ahead of fundamentals and Indian stocks look very over-owned at the moment.

According to him, there is a 80 percent probability that this is the peak for market this year and recommends market participants to brace for  a good correction before January 31. He sees base for Nifty at 7600-7700 level.

Those looking to bet on the market should keep adding on to stocks when there is a pullback, he says.

10:20am Divestment

The ONGC and Coal India divestments could be within days of each other as the government is keen to conclude the divestment by December 15, say sources.

The international road shows for ONGC and Coal India are done with and the domestic road shows are now underway. The government is expected to decide as early as next week which issue it will launch first, ONGC or Coal India.

Sources also say that foreign investors have sought a steep discount for the ONGC OFS issue. It is important to note that the cabinet had approved the ONGC OFS and had provided for a discount of upto 10 percent.

Sources say investors have sought a steep discount as there is no clarity on the subsidy-sharing mechanism and that foreign investors are keen to participate in the Coal India stake sale.

The government is hoping to lap up between USD 4-5 billion by divesting stake in both those companies.

10:00am Market Check

Equity benchmarks slipped into red in morning trade led by profit booking in metals, banks and auto stocks. The 50-share NSE Nifty broke the 8500 level, falling 31.10 points to 8499.05 while the 30-share BSE Sensex declined 54.38 points to 28445.16.

The broader markets lost ground too. The BSE Midcap and Smallcap indices fell 0.8 percent each. Advancing shares outnumbered declining ones by a ratio of 1306 to 687 on the Bombay Stock Exchange.

Among banks, ICICI Bank, State Bank of India and Axis Bank slipped nearly a percent. In the metal space, Tata Steel and Hindalco Industries dropped over 2 percent while Sesa Sterlite declined over a percent.

Engineering and construction major Larsen & Toubro and power producer Tata Power declined 1.5 percent each.

However, state-run power equipment maker BHEL climbed over 2 percent as brokerage house Citi upgraded the stock to buy from sell earlier and raised target price by 90 percent to Rs 335 (from Rs 176 earlier), implying 26 percent upside from current levels.

Telecom operator Bharti Airtel gained a percent as company and American Tower Corporation signed an agreement for sale of Nigeria tower portfolio. Bharti's Nigeria portfolio has 4,800 towers.

HDFC, HDFC Bank, Infosys, Hindustan Unilever, Maruti Suzuki and Wipro gained 0.3-0.8 percent. More information please visit this site www.bigprofitbuzz.com

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